As filed with the Securities and Exchange Commission on
August 1, 2008.

Registration
No. 333-151827

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION

Washington, D.C.
20549

Amendment No. 1

to

Form S-1

REGISTRATION
STATEMENT

UNDER

THE SECURITIES ACT OF
1933

LendingClub
Corporation

(Exact Name of Registrant as
Specified in Its Charter)

Delaware

6199

51-0605731

(State or Other Jurisdiction
of
Incorporation or Organization)

(Primary Standard Industrial
Classification Code No.)

(I.R.S. Employer
Identification No.)

LendingClub Corporation

440 North Wolfe Road

Sunnyvale, CA 94085

(408) 524-1540

(Address, including zip code,
and telephone number, including area code, of registrants
principal executive offices)

Renaud Laplanche, Chief Executive Officer

LendingClub Corporation

440 North Wolfe Road

Sunnyvale, CA 94085

(408) 524-1540

(Name, address, including zip
code, and telephone number, including area code, of agent for
service)

Copies to:

Meredith B. Cross

Erika L. Robinson

Wilmer Cutler Pickering Hale and Dorr LLP

1875 Pennsylvania Avenue, NW

Washington, D.C. 20006

(202) 663-6000

Approximate date of commencement of proposed sale to the
public: As soon as practicable after this
Registration Statement is declared effective.

If any of the securities being registered on this form are
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, as amended (the
Securities Act), check the following
box. þ

If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering. o

If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the
earlier effective registration statement for the same
offering. o

If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box
and list the Securities Act registration statement number of the
earlier effective registration statement for the same
offering. o

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated
filer o

Accelerated
filer o

Non-accelerated
filer o
(Do not check if a smaller reporting company)

Smaller reporting
company þ

CALCULATION OF REGISTRATION
FEE

Proposed Maximum

Amount of

Each Class of

Aggregate

Registration

Securities to be Registered

Offering Price(1)

Fee(2)(3)

Member Payment Dependent Notes

$600,000,000

$23,580

(1)

Estimated solely for the purpose of computing the registration
fee in accordance with Rule 457(o) under the Securities Act
of 1933, as amended.

(2)

Calculated pursuant to Rule 457(o) based on an estimate of
the proposed maximum aggregate offering price.

(3)

Previously paid.

The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to Section 8(a), may determine.

The
information contained in this prospectus is not complete and may
be changed. These securities may not be sold until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.

SUBJECT
TO COMPLETION, DATED AUGUST 1, 2008

$600,000,000

Member
Payment Dependent Notes

This is a public offering to Lending Clubs lender members
of up to $600,000,000 in principal amount of Member Payment
Dependent Notes issued by Lending Club. In this prospectus, we
refer to our Member Payment Dependent Notes as the
Notes.

We will issue the Notes in series. Each series will correspond
to a single consumer loan originated through our platform to one
of our borrower members. In this prospectus, we refer to these
consumer loans generally as member loans, and we
refer to the member loan funded with the proceeds we receive
from a particular series of Notes as the corresponding
member loan for the series.

Important terms of the Notes include the following, each of
which is described in detail in this prospectus:



Our obligation to make payments on a Note will be limited to an
amount equal to the lender members pro rata share of
amounts we receive with respect to the corresponding member loan
for that Note, net of our 1.00% service charge. We do not
guarantee payment of the Notes or the corresponding member
loans, and the Notes are not obligations of our borrower members.



The Notes will have a stated, fixed interest rate, which will be
the rate for the corresponding member loan. Interest rates on
member loans originated through our platform currently range
between 7.37% and 18.86% and are set based on a formula
described in this prospectus.



The Notes will bear interest from the date of issuance, be fully
amortizing and be payable monthly.



Each Note will have an initial maturity of three years and four
business days from issuance, subject to extension by the holder
for up to 120 days, as described in this prospectus.

We will offer Notes to our lender members at 100% of their
principal amount. The Notes will be offered only through our
website, and there will be no underwriters or underwriting
discounts.

The Notes will be issued in electronic form only and will not be
listed on any securities exchange. The Notes will not be
transferable except through
the
trading system. There can be no assurance, however, that a
market for Notes will develop on the trading system. Therefore,
lender members must be prepared to hold their Notes to maturity.

This offering is highly speculative and the Notes involve a
high degree of risk. Investing in the Notes should be considered
only by persons who can afford the loss of their entire
investment. See Risk Factors beginning on
page 12.

Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.

This prospectus describes our offering of our Member Payment
Dependent Notes, which we refer to in this prospectus as the
Notes. This prospectus is part of a registration
statement filed with the Securities and Exchange Commission,
which we refer to as the SEC. This prospectus, and
the registration statement of which it forms a part, speak only
as of the date of this prospectus. We will supplement this
registration statement from time to time as described below.

Unless the context otherwise requires, we use the terms
Lending Club, the Company, our
company, we, us and
our in this prospectus to refer to LendingClub
Corporation, a Delaware corporation.

This prospectus describes our offering of the Notes under two
main headings: About the Loan Platform and
About Lending Club.

The offering described in this prospectus is a continuous
offering pursuant to Rule 415 under the Securities Act of
1933, as amended (the Securities Act). Following the
date of this prospectus, we plan to offer Notes continuously,
and we expect that sales of Notes will occur on a daily basis
through the operation of our platform. From time to time, but at
least weekly, we will make filings of supplements to this
prospectus pursuant to Rule 424(b) under the Securities
Act, which we will refer to as Posting Reports in
which we will provide information about Notes currently being
offered for sale on our website. We also intend to make weekly
filings of supplements to this prospectus pursuant to
Rule 424(b) under the Securities Act, which we will refer
to as Weekly Sales Reports, in which we will report
sales of Notes for the previous week. The Weekly Sales Reports
will include information about the principal amount, loan grade
of the corresponding member loan, maturity and interest rate of
each series of Notes sold in the previous week. The Posting
Reports and Weekly Sales Reports will also be posted to our
website upon filing with the SEC.

We will prepare prospectus supplements to update this prospectus
for other purposes, such as to disclose changes to the terms of
our offering of the Notes, provide quarterly updates of our
financial and other information included in this prospectus and
disclose other material developments. We will file these
prospectus supplements with the SEC pursuant to Rule 424(b)
and post them on our website. When required by SEC rules, such
as when there is a fundamental change in our
offering or the information contained in this prospectus, or
when an annual update of our financial information is required
by the Securities Act or SEC rules, we will file post-effective
amendments to the registration statement of which this
prospectus forms a part, which will include either a prospectus
supplement or an entirely new prospectus to replace this
prospectus. We currently anticipate that post-effective
amendments will be required, among other times, when we change
interest rates applicable to Notes offered through our platform
or other material terms of the Notes. We currently expect that
these changes will be disclosed in prospectus supplements posted
on our website at the time of filing of the post-effective
amendment, rather than through complete revisions to this
prospectus.

We have filed a registration statement on
Form S-1
with the SEC in connection with this offering. In addition, upon
the effectiveness of our registration statement, we will be
required to file annual, quarterly and current reports and other
information with the SEC. You may read and copy the registration
statement and any other documents we have filed at the
SECs Public Reference Room at 100 F Street,
N.E., Room 1580, Washington, D.C. 20549. Please call
the SEC at
1-800-SEC-0330
for further information on the Public Reference Room. Our SEC
filings are also available to the public at the SECs
Internet site at
http://www.sec.gov.

This prospectus is part of the registration statement and does
not contain all of the information included in the registration
statement and the exhibits, schedules and amendments to the
registration statement. Some items are omitted in accordance
with the rules and regulations of the SEC. For further
information with respect to us and the Notes, we refer you to
the registration statement and to the exhibits and schedules to
the registration statement filed as part of the registration
statement. Whenever a reference is made in this prospectus to
any of our contracts or other documents, the reference may not
be complete and, for a copy of the contract or document, you
should refer to the exhibits that are a part of the registration
statement.

This summary highlights information contained elsewhere in
this prospectus. You should read the following summary together
with the more detailed information appearing in this prospectus,
including our financial statements and related notes, and the
risk factors beginning on page 12, before deciding whether
to purchase our Member Payment Dependent Notes.

Overview

Lending Club is an Internet-based social lending platform that
enables its borrower members to borrow money and its lender
members to purchase Member Payment Dependent Notes, the proceeds
of which fund specific loans made to individual borrower
members. We operate in the space known as social
lending.

About the
Loan Platform

Through our online platform, we allow qualified borrower members
to obtain unsecured loans with lower interest rates than they
could through credit cards or traditional banks. We also provide
our lender members with the opportunity to indirectly fund
specific member loans with credit characteristics, interest
rates and other terms the lender members find attractive by
purchasing Notes that in turn are dependent for payment on the
payments we receive from those borrower member loans. As a part
of operating our lending platform, we verify the identity of
members, obtain borrower members credit profiles from
consumer reporting agencies such as TransUnion, Experian or
Equifax and screen borrower members for eligibility to
participate in the platform. We also service the member loans on
an ongoing basis. See About the Loan Platform.

The Notes. Our lender members will have the
opportunity to buy Notes issued by Lending Club. Lender members
will be able to designate the particular member loan that they
want the proceeds of each Note they purchase to be used to fund.
The Notes will be special, limited obligations of Lending Club
only and not obligations of any borrower member. The Notes are
unsecured and holders of the Notes do not have a security
interest in the corresponding member loans or the proceeds of
those corresponding member loans.

Lending Club will pay principal and interest on each Note in a
series in an amount equal to each such Notes pro rata
portion of the principal and interest payments, if any, Lending
Club receives on the corresponding member loan funded by the
proceeds of that series, net of Lending Clubs 1.00%
service charge. Lending Club will also pay to lender members any
other amounts Lending Club receives on each Note, including late
fees and prepayments, subject to the 1.00% service charge,
except that Lending Club will not pay to lender members any
unsuccessful payment fees, collection fees we or a third-party
collection agency charge and any payments due to Lending Club on
account of the portion of the corresponding member loan, if any,
that Lending Club has funded in its capacity as a lender on the
platform. If Lending Club were to become subject to a bankruptcy
or similar proceeding, the holder of a Note will have a general
unsecured claim against Lending Club that may or may not be
limited in recovery to such borrower payments. See Risk
Factors  If we were to become subject to a bankruptcy
or similar proceeding.

The Member Loans. All member loans are
unsecured obligations of individual borrower members with a
fixed interest rate and three-year maturity. Each member loan is
originated through our website and funded by WebBank at closing.
WebBank is an FDIC-insured, Utah-chartered industrial bank that
serves as the lender for all member loans originated through our
platform. Immediately upon closing of a member loan, WebBank
assigns the member loan to Lending Club, without recourse to
WebBank, in exchange for the aggregate purchase price we have
received from lender members who have committed to purchase
Notes dependent on payments to be received on such member loan
plus any amounts of the member loan that we have determined to
fund ourselves. WebBank has no obligation to purchasers of the
Notes. See About the Loan Platform  How the
Lending Club Platform Operates  Purchasers of Notes
and Loan Closings.

LendingMatch. In making loan purchase
commitments under our prior structure (as discussed below),
roughly 50% of lender members used Lending Clubs
LendingMatch system, a proprietary search engine
that creates a sample listing of Notes responsive to search
criteria based on the lender members target weighted
average

interest rate for the lender members portfolio. See
About the Loan Platform  How the Lending Club
Platform Operates  LendingMatch.

About
Lending Club

We were incorporated in Delaware in October 2006 under the name
SocBank Corporation. We changed our name to LendingClub
Corporation in November 2006. Our principal executive offices
are located at 440 North Wolfe Road, Sunnyvale, CA 94085, and
our telephone number is
(408) 524-1540.
Our website address is www.lendingclub.com. Information
contained on our website is not incorporated by reference into
this prospectus.

From the launch of our platform in May 2007 until April 7,
2008, the operation of our platform differed from the structure
described in this prospectus, and we did not offer Notes.
Instead, our platform allowed lender members to purchase, and
take assignment of, member loans directly. Under that structure,
lender members were assigned anonymized, individual promissory
notes corresponding in principal amount to their purchase price,
subject to our right to service the member loans.

From April 7, 2008 until the date of this prospectus, we
did not offer lender members the opportunity to make any
purchases on our platform. During this time, we also did not
accept new lender member registrations or allow new funding
commitments from existing lender members. We continued to
service all previously funded member loans, and lender members
had the ability to access their accounts, monitor their member
loans and withdraw available funds without changes. The
borrowing side of our platform was generally unaffected during
this period. Borrower members could still apply for member
loans, but those member loans were funded and held only by
Lending Club.

We have made significant changes to the operation of our lending
platform that will become effective as of the date of this
prospectus. Our historical financial results and much of the
discussion in About Lending Club reflects the
structure of our lending platform and our operations prior to
the date of this prospectus. See About Lending Club.

Member Payment Dependent Notes, issued in series, with each
series of Notes related to one corresponding member loan.

Offering price

100% of principal amount of each Note.

Initial maturity date

Three years and four business days following issuance.

Final maturity date

120 days after the initial maturity date.

Extension election

Each Note will mature on the initial maturity date, unless any
principal or interest payments in respect of the corresponding
member loan remain due and payable to Lending Club upon the
initial maturity date and the holder of the Note elects to
extend the maturity of the Note to the final maturity date. If
the holder of a Note fails to elect to extend the maturity date,
Lending Club will have no further obligation to make payments on
that Note after the initial maturity date even if Lending Club
receives payments on the corresponding member loan after the
initial maturity date. If there are any amounts under the
corresponding member loan still due and owing to Lending Club
after the final maturity, Lending Club will have no further
obligation to make payments on the Notes of the series even if
Lending Club receives payments on the corresponding member loan
after the final maturity.

Interest rate

Each series of Notes will have a stated, fixed interest rate,
which is the interest rate for the corresponding member loan.

Payments on the Notes

We will pay principal and interest on any Note you purchase in
an amount equal to your pro rata portion of the principal and
interest payments, if any, we receive on the corresponding
member loan, net of our 1.00% service charge. We will also pay
you any other amounts we receive on the Notes, including late
fees and prepayments, subject to our 1.00% service charge,
except that we will not pay to lender members any unsuccessful
payment fees, collection fees we or our third-party collection
agency charge or any payments due to Lending Club on account of
portions of the corresponding member loan, if any, funded by
Lending Club in its capacity as a lender on the platform. We
will make any payments on the Notes within four business days
after we receive the payments from borrower members on the
corresponding member loan. The Notes are not subject to any
credit enhancement. See About the Loan
Platform  Description of the Notes for more
information.

Corresponding member loans to consumer borrowers

Lender members who purchase Notes of a particular series will
designate Lending Club to apply the proceeds from the sale of
each series of Notes to fund a corresponding member loan
originated through our platform to an individual consumer who is
one of our borrower members. Each member loan originated through
our platform is a three-year, fully amortizing consumer loan
made by WebBank to an individual Lending Club borrower member.
WebBank subsequently assigns the member loan to Lending Club
without recourse to WebBank in exchange for the aggregate
purchase price

Lending Club has received from lender members who have committed
to purchase Notes that are dependent on payments to be received
on such corresponding member loan. Member loans have fixed
interest rates that currently range between 7.37% and 18.86%.
Member loans are repayable in monthly installments and are
unsecured and unsubordinated. Member loans may be repaid at any
time by our borrower members without prepayment penalty. In the
case of a partial prepayment of a member loan, we automatically
recalculate the amortization schedule over the remainder of the
member loans three-year term, and the borrower
members monthly payment on the loan is correspondingly
reduced. See About the Loan Platform for more
information.

Ranking

The Notes will not be contractually senior or contractually
subordinated to any other indebtedness of Lending Club. The
Notes will be unsecured special, limited obligations of Lending
Club. Lending Club will pay principal and interest on each Note
in a series in an amount equal to each such Notes pro rata
portion of the principal and interest payments, if any, Lending
Club receives from the borrower member on the corresponding
member loan funded by the proceeds of that series, net of
Lending Clubs 1.00% service charge. Lending Club will also
pay to lender members any other amounts Lending Club receives on
each Note, including late fees and prepayments, subject to the
1.00% service charge, except that Lending Club will not pay to
lender members any unsuccessful payment fees, collection fees we
or our third-party collection agency charge or payments due to
Lending Club on account of the portions of the member loan, if
any, funded by Lending Club in its capacity as a lender on the
platform. In the event of a bankruptcy or similar proceeding of
Lending Club, the relative rights of the holder of a Note as
compared to the holders of other unsecured indebtedness of
Lending Club with respect to payment from the proceeds of the
corresponding member loan related to that Note or other assets
of Lending Club is uncertain. If Lending Club were to become
subject to a bankruptcy or similar proceeding, the holder of a
Note will have an unsecured claim against Lending Club that may
or may not be limited in recovery to the corresponding member
loan payments, as described in more detail below. For a more
detailed description of the possible implications if Lending
Club were subject to a bankruptcy or similar proceeding, see
Risk Factors  If we become subject to a
bankruptcy or similar proceeding.

As of June 30, 2008, Lending Club had approximately
$ in outstanding senior
indebtedness that is secured by substantially all assets of
Lending Club other than member loans corresponding to the Notes,
the proceeds of such member loans and the accounts through or
into which the proceeds of such member loans flow. As of the
same date, Lending Club also had approximately
$ in outstanding senior
indebtedness that is secured only by specific member loans
funded by Lending Club in its capacity as a lender on the
platform that do not correspond to any Notes and by the proceeds
of such member loans. The Notes do not restrict Lending
Clubs incurrence of other indebtedness or the grant or
imposition of liens or security interests on the assets of
Lending Club, including on the member loans corresponding to the
Notes. The Notes will rank effectively junior to the

rights of the holders of existing or future secured
indebtedness with respect to the assets securing such
indebtedness.

Service charge

Prior to paying a holder of a Note any payments on the Note, we
will deduct a service charge equal to 1.00% of any such payment
amounts. See About the Loan Platform  How the
Lending Club Platform Operates  Post-Closing Loan
Servicing and Collection for more information. The service
charge will reduce the effective yield on your Notes below their
stated interest rate.

Use of proceeds

We will use the proceeds of each series of Notes to fund the
corresponding member loan originated through our platform. See
About the Loan Platform for more information.

Electronic form and transferability

The Notes will be issued in electronic form only and will not be
listed on any securities exchange. The Notes will not be
transferable except through
the trading
system. There can be no assurance, however, that a market for
Notes will develop on the trading system. Therefore, lender
members must be prepared to hold their Notes to maturity. See
About the Loan Platform  Trading System.
Therefore, lender members must be prepared to hold their Notes
to maturity.

U.S. federal income tax consequences

Although the matter is not free from doubt, Lending Club intends
to treat the Notes as indebtedness of Lending Club for U.S.
federal income tax purposes. As a result of such treatment, the
Notes will have original issue discount, or OID, for U.S.
federal income tax purposes because payments on the Notes are
dependent on payments on the corresponding member loan. Further,
a holder of a Note will be required to include the OID in income
as ordinary interest income for U.S. federal income tax purposes
as it accrues (which may be in advance of interest being paid on
the Note), regardless of such holders regular method of
accounting. Prospective purchasers of the Notes should consult
their own tax advisors regarding the U.S. federal, state, local
and non-U.S.
tax consequences of the purchase and ownership of the Notes,
including any possible differing treatments of the Notes. See
About the Loan Platform  Certain U.S. Federal
Income Tax Considerations for more information.

The following diagram illustrates the basic structure of the
Lending Club platform for a single series of Notes. This graphic
does not demonstrate many details of the Lending Club platform,
including the effect of pre-payments, late payments, late fees
or collection fees. For additional information about the
structure of the Lending Club platform, see About the Loan
Platform.

Our platform allows qualified borrower members to obtain
unsecured loans with lower interest rates than they could
through credit cards or traditional banks. Our platform also
provides our lender members with the opportunity to invest in
notes that are dependent on borrower member loans with credit
characteristics, interest rates and other terms the lender
members find attractive. As a part of operating our lending
platform, we verify the identity of members, obtain borrower
members credit profiles from consumer reporting agencies,
such as TransUnion, Experian or Equifax and screen borrower
members for eligibility to participate in the platform. We also
service the member loans on an ongoing basis.

Q:

What are our Member Payment Dependent Notes?

A:

Our lender members may buy Member Payment Dependent Notes issued
by Lending Club. In this prospectus, we refer to our Member
Payment Dependent Notes as the Notes. The proceeds
of each series of Notes will be designated by the lender members
who purchase the Notes of the series to fund a corresponding
member loan originated through our platform to an individual
consumer who is one of our borrower members. Each series of
Notes will have a stated interest rate, which is the interest
rate for the corresponding member loan. We will pay principal
and interest on any Note you purchase in an amount equal to your
pro rata portion of the principal and interest payments, if any,
we receive on the corresponding member loan, net of our 1.00%
service charge. We will also pay you any other amounts we
receive on the Notes, including late fees and prepayments,
subject to our 1.00% service charge, except that we will not pay
to lender members any unsuccessful payment fees, collection fees
we or our third-party collection agency charge or any payments
due to Lending Club on account of portions of the corresponding
member loan, if any, that Lending Club has funded in its
capacity as a lender on the platform. The service charge will
reduce the effective yield on your Notes below their stated
interest rate. The Notes are special, limited obligations of
Lending Club only and not the borrower members. The Notes will
be unsecured and do not represent an ownership interest in the
corresponding member loans.

Q:

Who are our lender members?

A:

Our lender members are individuals and organizations that have
the opportunity to buy our Notes. Lender members must register
on our website. During lender registration, potential lender
members must agree to a credit profile authorization statement
for identification purposes, a tax withholding statement and the
terms and conditions of the Lending Club website, and must enter
into a note purchase agreement with Lending Club, which will
govern all purchases of Notes the lender member makes.

Q:

What are the member loans?

A:

The member loans are unsecured obligations of individual
borrower members with a fixed interest rate and three-year
maturity. Each member loan is originated through our website,
funded by WebBank at closing, and immediately assigned to
Lending Club upon closing in exchange for the aggregate purchase
price we have received from lender members who have committed to
purchase the Notes dependent on payments to be received on such
member loan. A member loan will be issued to a borrower member
if the loan has received full funding commitments, or if the
borrower chooses to accept partial funding of the loan after
receiving partial funding commitments.

Q:

Do member lenders loan funds directly to borrower members?

A:

No. Lender members do not make loans directly
to our borrower members. Instead, lender members purchase Notes
issued by Lending Club, the proceeds of which are designated by
the lender members who purchased the Notes to fund a loan to an
individual borrower member originated through the Lending Club
platform. Even though lender members do not make loans directly
to borrower members, they will nevertheless be wholly dependent
on borrower members for repayment of any Notes lender members
may purchase from Lending

Club. If a borrower member defaults on the borrower
members obligation to repay a corresponding member loan,
Lending Club will not have any obligation to make any payments
on the related Notes.

Q:

What member loan amounts are available to borrowers on our
platform?

A:

Borrowers may request member loans in amounts ranging from
$1,000 to $25,000. Currently, we do not loan to borrowers in
Idaho, Indiana, Iowa, Maine, North Carolina and North Dakota.

Q:

Who are our borrower members?

A:

Lending Club borrower members are individual consumers who have
registered on our platform. All Lending Club borrower members:

 must be U.S. citizens or permanent residents;

 must be at least 18 years old;

 must have valid email accounts;

 must satisfy our credit criteria (as described
below);

 must have U.S. social security numbers; and

 must have an account at a financial institution with
a routing transit number.

Q:

Does Lending Club participate in the platform as a lender?

A:

From time to time, Lending Club may participate in the Lending
Club platform as a lender. For example, during the time when our
site was not open to new lender member commitments, borrower
members could still apply for loans, which were funded and held
only by Lending Club. Although we have no obligation to do so,
we may fund portions of loan requests in the future.

Q:

How does Lending Club verify a borrower members
identity?

A:

During borrower registration, we verify the identity of members
by comparing supplied names, social security numbers, addresses
and telephone numbers against the names, social security
numbers, addresses and telephone numbers in the records of a
consumer reporting agency, as well as other anti-fraud and
identity verification databases. We also currently require each
new borrower member to supply information about the
members bank account.

Q:

What are the minimum credit criteria for borrower members?

A:

After we receive a loan request from a borrower member, we
evaluate whether the prospective borrower member meets our
credit criteria. Our borrower member credit criteria are
designed to be consistent with WebBanks loan underwriting
requirements and require prospective borrower members to have:

 a debt-to-income ratio (excluding mortgage) below
25%, as calculated by Lending Club based on (i) the
borrower members debt reported by a consumer reporting
agency; and (ii) the income reported by the borrower
member, which we verify in approximately 25% of cases; and

 a credit profile (as reported by a consumer
reporting agency) without any current delinquencies, recent
bankruptcy, collections or open tax liens and reflecting at
least four accounts ever opened, at least three accounts
currently open, no more than 10 credit inquiries in the past six
months, utilization of credit limit not exceeding 100% and a
minimum credit history of 12 months.

See About the Platform  How the Lending Club
Platform Operations  Minimum Credit Criteria and
Underwriting for a more detailed description of our
scoring process and evaluation of minimum credit criteria.

For borrower members that qualify, we assign one of 35 loan
grades, from A1 through G5, to each loan request, based on the
borrower members:

 FICO score;

 requested loan amount;

 currently open accounts;

 number of credit inquiries in the past six
months; and

 utilization of credit limit and length of credit
history.

Applying these grading criteria, the following factors lead to a
loan request being more likely to be designated grade A1:

 higher credit score;

 lower requested loan amount;

 fewer credit inquiries;

 at least 6, but not more than 21, open accounts;

 utilization of credit limit between 5% and
85%; and

 greater length of credit history.

See About the Loan Platform  How the Lending
Club Platform Operates  Interest Rates for more
information.

Q:

How do we set interest rates on member loans?

A:

Our interest rate working group sets the interest rates
applicable to our loan grades. After a loan requests loan
grade has been determined, we assign an interest rate to the
loan request. Interest rates currently range between 7.37% and
18.86%. We set the interest rates we assign to borrower loan
grades in three steps. First, we determine Lending Club base
rates. Second, we determine an assumed default rate that
attempts to project loan default rates. Third, we use the
assumed default rate to calculate an upward adjustment to the
base rates, which we call the Adjustment for Risk and
Volatility. See About the Loan Platform 
How the Lending Club Platform Operates  Interest
Rates.

Q:

What effect do the 1.00% service charge and our retaining
unsuccessful payment fees have on the expected return of the
Notes?

A:

The 1.00% service charge reduces both the interest and principal
payments you receive on your Notes. The 1.00% service charge
also reduces any late fees or amounts obtained from collections
(net of any collection fees charged by us or our outside
collection agency) that you may receive. Our retaining
unsuccessful payment fees paid by borrower members has no effect
on the payments you receive on your Notes. See About the
Loan Platform  How the Lending Club Platform
Operates  Post-Closing Loan Servicing and
Collection.

Q:

Will Lending Club make payments on a Note if the
corresponding member loan for the Note defaults?

A:

No. If the member loan corresponding to your
Note defaults and the borrower member does not pay Lending Club,
Lending Club will not be obligated to make payments on your
Note, and you will not receive any payments on your Note. We
have no obligation to make any payments of principal or interest
on a Note unless, and then only to the extent that, we receive
payments in respect of the corresponding member loan, and after
deduction of Lending Clubs service charge and any payments
due to Lending Club on account of the portion of the member
loan, if any, that Lending Club has funded in its capacity as a
lender on the platform.

No. The Notes are not secured by any
collateral, including the corresponding member loans, and are
not guaranteed or insured by any governmental agency or
instrumentality or any third party. The Notes are not subject to
any credit enhancement.

Q:

How do lender members receive payments on the Notes?

A:

All payments on the Notes are processed through the Lending Club
platform. If and when we make a payment on your Notes, the
payment will be deposited in your Lending Club account. You may
elect to have available balances in your Lending Club account
transferred to your bank account at any time, subject to normal
execution times for such transfers (generally 2-3 days).

Q:

Can lender members collect on late payments themselves?

A:

No. Lender members must depend on Lending Club
or our third-party collection agents to pursue collection on
delinquent member loans. If collection action must be taken in
respect of a member loan, we or the collection agency will
charge a collection fee of between 7% and 30% of any amounts
that are obtained. These fees will correspondingly reduce the
amounts of any payments you receive on the Notes.

Q:

What happens if a borrower member repays a member loan
early?

A:

We allow borrower members to make extra payments on, or prepay,
their member loans in part or entirely at any time without
penalty. In the event of a prepayment of the entire remaining
unpaid principal amount of a member loan on which your Notes are
dependent, you will receive your share of such prepayment, net
of our service charge, and interest will stop accruing after the
date on which such prepayment is received by us. If a borrower
member partially prepays a member loan, we will pay you your
share of the prepayment amount we receive, net of our service
charge, and we will make available to you a revised schedule of
anticipated payments reflecting the lower outstanding principal
balance and lower monthly payments of the corresponding member
loan.

Q:

How does Lending Club make money from the platform?

A:

We earn revenue from the fees we charge our borrower members and
lender members. We charge borrower members origination fees,
which currently range from 0.75% to 3.00%. We charge lender
members a service charge of 1.00% of all amounts paid by Lending
Club to lender members with respect to each Note. To a lesser
extent, we earn interest on member loans to the extent that we
fund those member loans ourselves.

Q:

How are the Notes being offered?

A:

We are offering the Notes directly to our lender members only
through our website for a purchase price of 100% of the
principal amount of the Notes. We are not using any
underwriters, and there will be no underwriting discounts.

Q:

Will I receive a certificate for my Notes?

A:

No. The Notes are issued only in electronic
form. This means that each Note will be stored on our website.
You can view your Notes online and print copies for your records
by visiting your secure, password-protected webpage in the
My Account section of our website.

Q:

How are the Notes treated for United States federal income
tax purposes?

A:

Although the matter is not free from doubt, Lending Club intends
to treat the Notes as indebtedness of Lending Club for
U.S. federal income tax purposes. As a result of such
treatment, the Notes will have original issue discount, or OID,
for U.S. federal income tax purposes because payments on
the Notes are dependent on payments on the corresponding member
loan. Further, a holder of a Note will be required to include
the OID in income as ordinary interest income for
U.S. federal income tax purposes as it accrues (which may
be in advance of interest being paid on the Note), regardless of
such holders regular method of accounting. Prospective
purchasers of the Notes should consult their own tax advisors
regarding the U.S. federal, state, local and
non-U.S. tax
consequences of the purchase and ownership of the Notes,
including any possible differing treatments of the Notes. See
About the Loan Platform  Certain
U.S. Federal Income Tax Considerations.

The Notes will not be transferable except through
the trading
system. There can be no assurance, however, that a market for
Notes will develop on the trading system. Therefore, lender
members must be prepared to hold their Notes to maturity. See
About the Loan Platform  Trading System.

Q:

Are there any risks associated with an investment in
Notes?

A:

Yes. The Notes are highly risky and
speculative. Investing in the Notes should be considered only by
persons who can afford the loss of their entire investment.
Please see Risk Factors.

Our Notes involve a high degree of risk. In deciding whether
to purchase Notes, you should carefully consider the following
risk factors. Any of the following risks could have a material
adverse effect on the value of the Notes you purchase and could
cause you to lose all or part of your initial purchase price or
future principal and interest payments you expect to receive.

You
may lose some or all of your initial purchase price for the
Notes because the Notes are highly risky and speculative. Only
lender members who can bear the loss of their entire purchase
price should purchase our Notes.

The Notes are highly risky and speculative because payments on
the Notes depend entirely on payments to Lending Club of
unsecured consumer finance obligations of individual borrowers
and contemporaneous payments on the Notes, which are special,
limited obligations of Lending Club. Notes are suitable
purchases only for lender members of adequate financial means.
If you cannot afford to lose all of the money you plan to invest
in Notes, you should not purchase Notes. You should not assume
that a Note is appropriate for you just because it corresponds
to a loan listed on the Lending Club platform or is presented as
a choice by LendingMatch.

Payments
on the Notes depend entirely on payments we receive on
corresponding member loans. If a borrower member fails to make
any payments on the corresponding member loan related to your
Note, you will not receive any payments on your
Note.

We will only make payments on the Notes after we receive
borrower members payments on corresponding member loans,
net of our service charge and any unsuccessful payment fees,
collection fees or payments due to Lending Club on account of
portions of the corresponding member loan, if any, funded by
Lending Club in its capacity as a lender on the platform. If we
do not receive payments on the corresponding member loan related
to your Note, you will not be entitled to any payments under the
terms of the Notes, and you will not receive any payments. The
failure of a borrower member to repay a loan is not an event of
default under the terms of the Notes.

The
Notes are special, limited obligations of Lending Club only and
are not secured by any collateral or guaranteed or insured by
any third party.

The Notes will not represent an obligation of borrower members
or any other party except Lending Club, and are special, limited
obligations of Lending Club. The Notes are not secured by any
collateral and are not guaranteed or insured by any governmental
agency or instrumentality or any third party.

Member
loans are not secured by any collateral or guaranteed or insured
by any third party, and you must rely on Lending Club and our
designated third-party collection agency to pursue collection
against any borrower member.

Member loans are unsecured obligations of borrower members. They
are not secured by any collateral, not guaranteed or insured by
any third party and not backed by any governmental authority in
any way. Lending Club and its designated third-party collection
agency will, therefore, be limited in their ability to collect
member loans.

Moreover, member loans are obligations of borrower members to
Lending Club, not obligations to holders of Notes. Holders of
Notes will have no recourse to borrower members and no ability
to pursue borrower members to collect payments under member
loans. Holders of Notes may look only to Lending Club for
payment of the Notes, and Lending Clubs obligation to pay
the Notes is limited as described in this prospectus.
Furthermore, if a borrower member fails to make any payments on
the member loan corresponding to a Note, the holder of that Note
will not receive any payments on that Note. The holder of that
Note will not be able to pursue collection efforts against any
borrower member and will not be able to obtain the identity of
the borrower member in order to contact the borrower member
about the defaulted member loan. See About the
Platform  Description of the Notes.

Borrower
member credit information may be inaccurate or may not
accurately reflect the borrower members creditworthiness,
which may cause you to lose part or all of the purchase price
you pay for a Note.

Lending Club obtains borrower member credit information from
consumer reporting agencies, such as TransUnion, Experian or
Equifax, and assigns loan requests one of 35 Lending Club loan
grades, from A1 through G5 based on the reported credit score
and other information reported by the consumer reporting
agencies, self-reported borrower information and other metrics.
See About the Loan Platform  How the Lending
Club Platform Operates  Minimum Credit Criteria and
Underwriting. A credit score or loan grade assigned to a
borrower member may not reflect that borrower members
actual creditworthiness because the credit score may be based on
outdated, incomplete or inaccurate data, and Lending Club does
not verify the information obtained from the borrower
members credit report. Additionally, there is a risk that,
following the date of the credit report that Lending Club
obtains and reviews, a borrower member may have:



become delinquent in the payment of an outstanding obligation;



defaulted on a pre-existing debt obligation;



taken on additional personal debt; or



sustained other adverse financial events.

Moreover, lender members do not, and will not, have access to
financial statements of borrower members, or to other detailed
financial information about borrower members.

Information
supplied by borrower members may be inaccurate or intentionally
false.

Borrower members supply a variety of unverified information that
is included in the borrower member loan listings on our website.
We do not verify this information, and it may be inaccurate. For
example, we do not verify a borrower members stated social
affiliations (such as educational affiliations), home ownership
status, job title, employer or tenure, and the information
borrower members supply may be inaccurate or intentionally
false. Borrower members may misrepresent their intentions for
the use of loan proceeds. Unless we have indicated otherwise in
a loan listing, we do not verify a borrower members stated
income. For example, we do not verify borrower member paystubs,
IRS
Forms W-2,
federal or state income tax returns, bank and savings account
balances, retirement account balances, letters from employers,
home ownership or rental records, car ownership records or any
records related to past bankruptcy and legal proceedings. The
identity of borrower members is not revealed to lender members,
and lender members also have no ability to obtain or verify
borrower member information either before or after they purchase
a Note. Potential lender members may only communicate with
borrower members through Lending Club website postings, and then
only on an anonymous and unverified basis. If you rely on false,
misleading or unverified information supplied by borrower
members in deciding to purchase Notes, you may lose part or all
of the purchase price you pay for a Note. Consequently, lender
members should rely on loan grade, which we determine based on
third party credit report information, and the size of the loan
request, and should not rely on unverified information provided
by borrower members.

While
we take precautions to prevent borrower member fraud, it is
possible that fraud may occur and adversely affect your ability
to receive the principal and interest payments that you expect
to receive on those Notes.

We use identity and fraud checks with a third-party provider to
verify each borrower members identity and credit history,
as described in more detail in About the Loan
Platform  How the Lending Club Platform
Operates  New Member Registration.
Notwithstanding our efforts, there is a risk that fraud may
occur and remain undetected by us. While we will repurchase
Notes in limited identity fraud circumstances involving the
corresponding member loan, we are not otherwise obligated to
repurchase a Note from you for any other reason. If Lending Club
repurchases a Note based on identity fraud involving the
corresponding member loan, you will only receive an amount equal
to the outstanding principal balance of the Note. See
About the Loan Platform  How the Lending Club
Platform Operates  Identity Fraud Reimbursement.

We do
not have significant historical performance data about borrower
member performance on Lending Club member loans. Default rates
on the member loans may increase.

We are in the early stages of our development and have a limited
operating history. We began operations as an application on
Facebook.com in May 2007. In September 2007, we expanded our
operations and launched our public website, www.lendingclub.com.
Due to our limited operational history, we do not have
significant historical performance data regarding borrower
member performance on the member loans, and we do not yet know
what the long-term loan loss experience will be. The estimated
default rates we use in calculating interest rates have not been
developed from Lending Club loss histories. Member loans
originated through the Lending Club platform may default more
often than these estimated default rates. As loan loss
experience increases on the Lending Club platform, we may change
how interest rates are set, and lender members who have
purchased Notes prior to any such changes will not benefit from
these changes.

Default
rates on the member loans may increase as a result of economic
conditions beyond our control and beyond the control of borrower
members.

Member loan default rates may be significantly affected by
economic downturns or general economic conditions beyond our
control and beyond the control of individual borrower members.
In particular, default rates on member loans on which the Notes
are dependent may increase due to factors such as prevailing
interest rates, the rate of unemployment, the level of consumer
confidence, residential real estate values, the value of the
U.S. dollar, energy prices, changes in consumer spending,
the number of personal bankruptcies and other factors.

If
payments on the corresponding member loans relating to your
Notes become more than 30 days overdue, it is likely you
will not receive the full principal and interest payments that
you expect to receive on your Notes due to collection fees, and
you may not recover any of your original purchase
price.

If the borrower member fails to make a required payment on a
member loan within 30 days of the due date, Lending Club
will pursue reasonable collection efforts in respect of the
member loan. Referral of a delinquent member loan to a
collection agency on the 31st day of its delinquency will
be considered reasonable collection efforts. If we refer a loan
to a collection agency, we will have no other obligation to
attempt to collect on delinquent loans. Lending Club may also
handle collection efforts in respect of a delinquent member loan
directly. If payment amounts on a delinquent member loan are
received from a borrower member more than 30 days after their
due date, then we, or, if we have referred the delinquent loan
to an outside collection agency, that collection agency, will
retain a percentage of any funds recovered from such borrower
member as a service fee before any principal or interest becomes
payable to you from recovered amounts in respect of Notes
related to the corresponding member loan. Collection fees range
from 7% to 30% of recovered amounts. See About the
Platform  How the Lending Club Platform
Operations  Post-Closing Loan Servicing and
Collection.

Lending Club or the collection agency may not be able to recover
some or all of the unpaid balance of a non-performing member
loan, and a lender member who has purchased a Note dependent on
the non-performing member loan would then receive nothing or a
small fraction of the unpaid principal and interest of the Note.
You must rely on the collection efforts of Lending Club and the
designated collection agency, and you are not permitted to
attempt to collect payments on the member loans in any manner.

If you
decide to invest through the platform and concentrate your
investment in a single Note, your entire return will depend on
the performance of a single member loan.

Member loans originated through the Lending Club platform have a
wide range of credit grades, and we expect that some borrower
members will default on their member loans. If you decide to
invest through the platform and concentrate your investment in a
single Note, your entire return will depend on the performance
of a single member loan. For example, if you plan to purchase
$100 of Notes, and choose to invest the entire $100 in a single
Note instead of in four $25 Notes corresponding to the member
loans of four different borrowers, your entire $100 investment
will depend on the performance of a single member loan. Failing
to diversify your investment increases the risk of losing your
entire investment due to a single borrower members
default, or a small number of borrower

member defaults. Diversification, however, will not eliminate
the risk that you may lose some, or all, of the expected
principal and interest payments on your Notes.

In the
unlikely event that we receive payments on the corresponding
member loans relating to your Notes after the final maturity
date, or after the initial maturity date if you do not elect to
extend the maturity of the Notes, you will not receive payments
on your Notes after maturity.

Each Note will mature on the initial maturity date, unless any
principal or interest payments in respect of the corresponding
member loan remain due and payable to Lending Club upon the
initial maturity date and the holder of the Note elects to
extend the maturity of the Note to the final maturity date. If
the holder of a Note fails to elect to extend the maturity date,
Lending Club will have no further obligation to make payments on
that Note after the initial maturity date, even in the unlikely
event that Lending Club receives payments of the corresponding
member loan after the initial maturity date. If there are any
amounts under the corresponding member loan still due and owing
to Lending Club after the final maturity, Lending Club will have
no further obligation to make payments on the Notes of the
series even if Lending Club receives payments on the
corresponding member loan after the final maturity.

The
member loans on which the Notes are dependent do not restrict
borrower members from incurring additional unsecured or secured
debt, nor do they impose any financial restrictions on borrower
members during the term of the member loan, which may impair
your ability to receive the full principal and interest payments
that you expect to receive on a Note.

If a borrower member incurs additional debt after obtaining a
member loan through the Lending Club platform, the additional
debt may impair the ability of that borrower member to make
payments on the borrowers member loan and your ability to
receive the principal and interest payments that you expect to
receive on Notes dependent on those loans. In addition, the
additional debt may adversely affect the borrower members
creditworthiness generally, and could result in the financial
distress, insolvency, or bankruptcy of the borrower member. To
the extent that the borrower member has or incurs other
indebtedness and cannot pay all of its indebtedness, the
borrower member may choose to make payments to creditors other
than Lending Club.

The member loans are unsecured credit obligations of individual
borrower members. To the extent borrower members incur other
indebtedness that is secured, such as mortgage, home equity or
auto loans, the ability of the secured creditors to exercise
remedies against the assets of the borrower member may impair
the borrower members ability to repay the member loan on
which your Note is dependent. Borrower members may also choose
to repay obligations under secured indebtedness before repaying
member loans originated through the Lending Club platform
because the borrower members have no collateral at risk in the
case of the member loans. A lender member will not be made aware
of any additional debt incurred by a borrower member, or whether
such debt is secured.

The
member loans do not contain any cross-default or similar
provisions. If borrower members default on their debt
obligations other than on the member loans, the ability to
collect on member loans on which your Notes are dependent may be
substantially impaired.

The member loans do not contain cross-default provisions. A
cross-default provision makes a default under certain debt of a
borrower member an automatic default on other debt of that
borrower member. Because the member loans do not contain
cross-default provisions, a borrower members loan will not
be placed automatically in default upon that borrower
members default on any of the borrower members other
debt obligations, unless there are independent grounds for a
default on the member loan. The member loans will not be
referred to a third-party collection agency for collection
because of a borrower members default on debt obligations
other than the member loans. If a borrower member defaults on
debt obligations owed to a third party and continues to satisfy
payment obligations under the member loans, the third party may
seize the borrowers assets or pursue other legal action
against the borrower member before the borrower member defaults
on the member loans. Payments on Notes may be substantially
reduced if the borrower member subsequently defaults on the
member loans, and you may be unable to recoup any or all of your
expected principal and interest payments on those Notes.

Borrower
members may seek the protection of debtor relief under federal
bankruptcy or state insolvency laws, which may result in the
nonpayment of your Notes.

Borrower members may seek protection under federal bankruptcy
law or similar laws. If a borrower member files for bankruptcy
(or becomes the subject of an involuntary petition), a stay will
go into effect that will automatically put any pending
collection actions on hold and prevent further collection action
absent bankruptcy court approval. If we receive notice that a
borrower member has filed for protection under the federal
bankruptcy laws, or has become the subject of an involuntary
bankruptcy petition, we will put the borrower members loan
account into bankruptcy status. When we put a member
loan into bankruptcy status, we terminate automatic monthly ACH
debits and do not undertake collection activity without
bankruptcy court approval. Whether any payment will ultimately
be made or received on a member loan after a bankruptcy status
is declared depends on the borrower members particular
financial situation. It is possible that the borrower
members personal liability on the member loan will be
discharged in bankruptcy. In most cases involving the bankruptcy
of a borrower member, unsecured creditors, including Lending
Club as holder of the member loans, will receive only a fraction
of any amount outstanding on their member loans, if anything.
See About the Loan Platform  How the Lending
Club Platform Operates  Post-Closing Loan Servicing
and Collection.

Federal
law entitles borrower members who enter active military service
to an interest rate cap and certain other rights that may
inhibit the ability to collect on loans and reduce the amount of
interest paid on the corresponding Notes.

Federal law provides borrower members on active military service
with rights that may delay or impair our ability to collect on a
borrower member loan corresponding to your Note. The
Servicemembers Civil Relief Act requires that the interest rate
on preexisting debts, such as member loans, be set at no more
than 6% while the qualified servicemember or reservist is on
active duty. A holder of a Note that is dependent on such a
member loan will not receive the difference between 6% and the
original stated interest rate for the member loan during any
such period. This law also permits courts to stay proceedings
and execution of judgments against servicemembers and reservists
on active duty, which may delay recovery on any member loans in
default, and, accordingly, payments on Notes that are dependent
on these member loans. We do not take military service into
account in assigning loan grades to borrower member loan
requests. See About Lending Club  Government
Regulation  Licensing and Consumer Protection
Laws  Servicemembers Civil Relief Act.

The
death of a borrower member may substantially impair your ability
to recoup the full purchase price of Notes that are dependent on
the member loan to that borrower member or to receive the
interest payments that you expect to receive on the
Notes.

All borrower members are individuals. If a borrower member with
outstanding obligations under a member loan dies while the
member loan is outstanding, generally, we will seek to work with
the executor of the estate of the borrower member to obtain
repayment of the member loan. However, the borrower
members estate may not contain sufficient assets to repay
the member loan on which your Note is dependent. In addition, if
a borrower member dies near the end of the term of a member
loan, it is unlikely that any further payments will be made on
the Notes corresponding to such member loan, because the time
required for the probate of the estate may extend beyond the
initial maturity date and the final maturity date of the Notes.

The
Lending Club platform allows a borrower member to prepay a
member loan at any time without penalty. Borrower member loan
prepayments will extinguish or limit your ability to receive
additional interest payments on a Note.

Borrower member loan prepayment occurs when a borrower member
decides to pay some or all of the principal amount on a member
loan earlier than originally scheduled. A borrower member may
decide to prepay all or a portion of the remaining principal
amount at any time without penalty. In the event of a prepayment
of the entire remaining unpaid principal amount of a member loan
on which your Notes are dependent, you will receive your share
of such prepayment but further interest will not accrue after
the date on which the payment is made. If a borrower member
prepays a portion of the remaining unpaid principal balance on a
member loan on which your Notes are dependent, the term of the
member loan will not change, but interest will cease to accrue
on the prepaid

portion and future monthly payment amounts, including interest
amounts, will be reduced. If a borrower member prepays a member
loan in full or in part, you will not receive all of the
interest payments that you originally expected to receive on
Notes that are dependent on that member loan, and you may not be
able to find a similar rate of return on another investment at
the time at which the member loan is prepaid. See About
the Loan Platform  Description of the
Notes  Prepayments.

Prevailing
interest rates may change during the terms of the member loans
on which your Notes are dependent. If this occurs, you may
receive less value from your purchase of the Notes in comparison
to other ways you may invest your money. Additionally, borrower
members may prepay their member loans due to changes in interest
rates, and you may not be able to redeploy the amounts you
receive from prepayments in a way that offers you the return you
expected to receive from the Notes.

The member loans on which the Notes are dependent have a term of
three years and bear fixed, not floating, rates of interest. If
prevailing interest rates increase, the interest rates on Notes
you purchase might be less than the rate of return you could
earn if you invested your purchase price in a different
investment.

While you may still receive a return on your purchase price for
the Notes through the receipt of amounts equal to the interest
portion of a borrower members payments on the member loan,
if prevailing interest rates exceed the rate of interest payable
on the member loan, the payments you receive during the term of
the Note may not reflect the full opportunity cost to you when
you take into account factors such as the time value of money.

There is no prepayment penalty for borrower members who prepay
their member loans. If prevailing interest rates on consumer
loans decrease, borrower members may choose to prepay their
member loans with money they borrow from other sources or other
resources, and you may not receive the interest payments on
Notes dependent on those member loans that you expect to receive
or be able to find an alternative use of your money to realize a
similar rate of return at the time at which the Note is prepaid.

Lender
member funds in a Lending Club lender member account do not earn
interest.

Your Lending Club lender member account represents an interest
in a pooled bank account that does not earn interest. For a
description of Lending Club member accounts, see About the
Loan Platform  How the Lending Club Platform
Operates  Loan Funding and Treatment of Lender Member
Balances.

The
Notes will not be listed on any securities exchange, will not be
transferable except through
the trading
system, and must be held only by Lending Club lender members.
You should be prepared to hold the Notes you purchase until they
mature.

The Notes will not be listed on any securities exchange. All
Notes must be held by Lending Club lender members. The Notes
will not be transferable except through
the trading
system. There can be no assurance that a market for Notes will
develop on the trading system, or that the system will continue
to operate. Therefore, lender members must be prepared to hold
their Notes to maturity. See About the Loan
Platform  Trading System.

The
U.S. federal income tax consequences of an investment in the
Notes are uncertain.

No authority directly addresses the treatment of the Notes or
instruments similar to the Notes for U.S. federal income
tax purposes. Although the matter is not free from doubt,
Lending Club intends to treat the Notes as indebtedness of
Lending Club for U.S. federal income tax purposes. As a
result of such treatment, the Notes will have original issue
discount, or OID, for U.S. federal income tax purposes
because payments on the Notes are dependent on payments on the
corresponding member loan. Further, a holder of a Note will be
required to include the OID in income as ordinary interest
income for U.S. federal income tax purposes as it accrues
(which may be in advance of interest being paid on the Note),
regardless of such holders regular method of accounting.
This characterization is not binding on the IRS, and the IRS may
take contrary positions. Any differing treatment of the Notes
could significantly affect the amount, timing and character of
income, gain or loss in respect of an investment in the Notes.
Accordingly, all prospective purchasers of the Notes are advised
to consult their own tax advisors regarding the
U.S. federal, state, local and
non-U.S. tax
consequences of the purchase and ownership of the Notes

(including any possible differing treatments of the Notes). For
a discussion of the U.S. federal income tax consequences of
an investment in the Notes, see About the Loan
Platform  Certain U.S. Federal Income Tax
Considerations.

We
face a contingent liability for potential securities law
violations in respect of loans sold to our lender members from
May 2007 until April 7, 2008. This contingent liability may
impair our ability to operate our platform and service the
member loans that correspond to your Notes.

Loans sold to lender members through our platform from our
launch in May 2007 until April 7, 2008 may be viewed
as involving an offering of securities that was not registered
or qualified under federal or state securities laws. If the sale
of these loans were viewed as an unregistered offering of
securities, our lender members who hold these loans may be
entitled to rescind their purchase and be paid their unpaid
principal amount of the loans plus statutory interest. As of
June 30, 2008, the aggregate principal balance of
loans purchased through our platform by purchasers not
affiliated with Lending Club was $7.3 million. Generally,
the federal statute of limitations for noncompliance with the
requirement to register securities under the Securities Act is
one year from the violation. If a significant number of our
lender members sought rescission, or if we were subject to a
class action securities lawsuit, our ability to maintain our
platform and service the member loans to which your Notes
correspond may be adversely affected.

We
have a limited operating history. As an online company in the
early stages of development, we face increased risks,
uncertainties, expenses and difficulties.

If we are successful, the number of borrower members and lender
members and the volume of member loans originated through the
Lending Club platform will increase, which will require us to
increase our facilities, personnel and infrastructure in order
to accommodate the greater servicing obligations and demands on
the Lending Club platform. The Lending Club platform is
dependent upon our website in order to maintain current listings
and transactions in the member loans and Notes. We must
constantly add new hardware and update our software and website,
expand our customer support services and add new employees to
maintain the operations of the Lending Club platform, as well as
to satisfy our servicing obligations on the member loans and
make payments on the Notes. If we are unable to increase the
capacity of the Lending Club platform and maintain the necessary
infrastructure, you may experience delays in receipt of payments
on your Notes and periodic downtime of our systems.

If we
are unable to increase transaction volumes, our business and
results of operations will be affected adversely.

To succeed, we must increase transaction volumes on the Lending
Club platform by attracting a large number of borrower members
and lender members in a cost-effective manner, many of whom have
not previously participated in social lending. We have
experienced a high number of inquiries from potential borrower
members who do not meet our criteria for submitting a member
loan request. We have also experienced from time to time
borrower member loan requests for amounts that exceed the
aggregate amount of lender member purchase commitments. We have
relied on our credit facilities with third parties, such as
Silicon Valley Bank (SVB), Gold Hill Venture Lending
03, LP (Gold Hill), and other lenders to borrow
funds which we used to participate in the platform as a lender
to partially address the shortfall between borrower member loan
requests and lender member purchase commitments. We expect these
shortfalls to continue for the foreseeable future, and our
ability to obtain funds to help address this shortfall may be
subject to broader developments in the credit markets, which are
currently experiencing a general tightening. If we are not able
to attract qualified borrower members and sufficient lender
member purchase commitments, we will not be able to increase our
transaction volumes. Additionally, we rely on a variety of
methods to drive traffic to our website. If we are unable to use
any of our current or future marketing initiatives or the cost
of these initiatives were to significantly increase, we may not
be able to attract new members in a cost-effective manner and,
as a result, our revenue and results of operations would be
affected adversely, which may impair our ability to maintain the
Lending Club platform.

We
will need to raise substantial additional capital to fund our
operations, and if we fail to obtain additional funding, we may
be unable to continue operations. Our independent auditors have
raised substantial doubt about our ability to continue as a
going concern due to our recurring losses from operations since
inception.

At this early stage in our development, we have funded
substantially all of our operations with proceeds from venture
capital financings, private placements and bank financings. In
order to continue the development of the Lending Club platform,
we will require substantial additional funds. For example, for
the fiscal year ended March 31, 2008, our cash outflow to
fund operations was approximately $6.0 million. In
addition, our independent auditors have raised substantial doubt
about our ability to continue as a going concern due to our
recurring losses from operations since inception. To meet our
financing requirements in the future, we may raise funds through
equity offerings, debt financings or strategic alliances.
Raising additional funds may involve agreements or covenants
that restrict our business activities and options. Additional
funding may not be available to us on favorable terms, or at
all. If we are unable to obtain additional funds, we may be
forced to reduce or terminate our operations.

The
market in which we participate is competitive and, if we do not
compete effectively, our operating results could be
harmed.

The consumer lending market is competitive and rapidly changing.
With the introduction of new technologies and the influx of new
entrants, we expect competition to persist and intensify in the
future, which could harm our ability to increase volume on the
Lending Club platform.

Our principal competitors include major banking institutions,
credit unions, credit card issuers and other consumer finance
companies, as well as other social lending platforms, including
Prosper Marketplace, Virgin Money and Zopa. Competition
could result in reduced volumes, reduced fees or the failure of
our social lending platform to achieve or maintain more
widespread market acceptance, any of which could harm our
business. In addition, in the future we may experience new
competition from more established Internet companies, such as
eBay Inc., Google Inc. or Yahoo! Inc., possessing large,
existing customer bases, substantial financial resources and
established distribution channels. If any of these companies or
any major financial institution decided to enter the social
lending business, acquire one of our existing competitors or
form a strategic alliance with one of our competitors, our
ability to compete effectively could be significantly
compromised and our operating results could be harmed.

Most of our current or potential competitors have significantly
more financial, technical, marketing and other resources than we
do and may be able to devote greater resources to the
development, promotion, sale and support of their platforms and
distribution channels. Our potential competitors may also have
longer operating histories, more extensive customer bases,
greater brand recognition and broader customer relationships
than we have. These competitors may be better able to develop
new products, to respond quickly to new technologies and to
undertake more extensive marketing campaigns. Our industry is
driven by constant innovation. If we are unable to compete with
such companies and meet the need for innovation, the demand for
our platform could stagnate or substantially decline.

If we
fail to promote and maintain our brand in a cost-effective
manner, we may lose market share and our revenue may
decrease.

We believe that developing and maintaining awareness of the
Lending Club brand in a cost-effective manner is critical to
achieving widespread acceptance of social lending through
Lending Club and attracting new members. Furthermore, we believe
that the importance of brand recognition will increase as
competition in the social lending industry increases. Successful
promotion of our brand will depend largely on the effectiveness
of our marketing efforts and the member experience on the
Lending Club platform. Historically, our efforts to build our
brand have involved significant expense, and it is likely that
our future marketing efforts will require us to incur
significant additional expenses. These brand promotion
activities may not yield increased revenues and, even if they
do, any revenue increases may not offset the expenses we incur
to promote our brand. If we fail to successfully promote and
maintain our brand, or if we incur substantial expenses in an
unsuccessful attempt to promote and maintain our

brand, we may lose our existing members to our competitors or be
unable to attract new members, which would cause our revenue to
decrease and may impair our ability to maintain the Lending Club
platform.

We
have incurred net losses in the past and expect to incur net
losses in the future. If we become insolvent or bankrupt, you
may lose your investment.

We have incurred net losses in the past and we expect to incur
net losses in the future. As of March 31, 2008, our
accumulated deficit was $7.8 million and our total
stockholders deficit was $4.8 million. Our net loss
for the year ended March 31, 2008 was $7.0 million. We
have not been profitable since our inception, and we may not
become profitable. In addition, we expect our operating expenses
to increase in the future as we expand our operations. If our
operating expenses exceed our expectations, our financial
performance could be adversely affected. If our revenue does not
grow to offset these increased expenses, we may never become
profitable. In future periods, we may not have any revenue
growth, or our revenue could decline. Our failure to become
profitable could impair the operations of the Lending Club
platform by limiting our access to working capital to operate
the platform. If we were to become insolvent or bankrupt, an
event of default would occur under the terms of the Notes, and
you may lose your investment.

We have incurred substantial senior secured indebtedness under
bank credit facilities with SVB and Gold Hill and other notes
issued to other investors. The operating and financial
restrictions in these debt agreements, as well as the required
debt service and repayment obligations thereunder, could
adversely affect our financial performance. In addition, our
ability to borrow additional funds or otherwise finance our
future operations will be limited by the existence and terms of
the debt agreements. If we are unable to repay our obligations
other than the Notes and otherwise finance our future
operations, such inability will have an adverse impact on our
ability to operate our platform and service the Notes, which
could adversely affect the payments you receive on the Notes.

Our credit agreements contain restrictive covenants and other
limitations that, if not complied with, could result in a
default under the credit agreements and an acceleration of our
obligations under the credit agreements. We are not certain
whether we would have, or be able to obtain, sufficient funds to
make such accelerated payments, and a failure to do so could
adversely affect our ability to operate or platform and service
the Notes, which could adversely affect the payments you receive
on the Notes.

We are in violation of certain covenants under our SVB and Gold
Hill facilities because we stopped accepting lender member
commitments during the SEC registration process and also because
we have not maintained our primary operating account with SVB.
Although the continuing existence of these covenant violations
constitutes events of default under the facilities, we entered
into forbearance agreements with SVB and Gold Hill in June 2008,
under which they agreed to forbear from exercising their rights
against us with respect to these events of default through
September 15, 2008. There can be no assurance that SVB and
Gold Hill would extend the forbearance agreements if we are
unable to cure the covenant violations before September 15,
2008.

We
have secured our debt facilities by pledging all of our assets
except our intellectual property rights, the corresponding
member loans and all payments we receive in respect of
corresponding member loans.

In order to induce SVB, Gold Hill Venture, and other investors
to enter into credit agreements and other debt agreements with
us, we have pledged all of our assets except our intellectual
property rights, the corresponding member loan promissory notes
and payments we receive in respect of corresponding member loans
to SVB, Gold Hill and other investors to secure our
repayment obligations under these credit agreements and other
debt agreements. If we are unable to repay any amounts owed
under these credit agreements or other debt agreements, we could
lose some or all of our assets and be forced to discontinue our
business operations. In addition, because our obligations to
SVB, Gold Hill and other investors are secured, collectively,
with a first priority lien against such assets, we may have
difficulty obtaining additional debt financing from another
lender or obtaining new debt financing on terms favorable to us,
because a new lender may have to be willing to be subordinate to
SVB, Gold Hill and other investors.

The Notes will rank effectively junior to our existing secured
indebtedness and to any future secured indebtedness to the
extent of the collateral for that secured indebtedness. The
Notes do not limit or prevent our incurring future indebtedness,
whether unsecured or secured by all or a portion of our assets.

Our
arrangements for backup servicing are limited. If we fail to
maintain operations, you will experience a delay and increased
cost in respect of your expected principal and interest payments
on your Notes, and we may be unable to collect and process
repayments from borrower members.

We have made arrangements for only limited backup servicing. If
our platform were to fail or we became insolvent, we would
attempt to transfer our member loan servicing obligations to a
third party
back-up
servicer. There can be no assurance that a
back-up
servicer will be willing or able to adequately perform the
servicing of the outstanding member loans. If a
back-up
servicer assumes the servicing of the member loans, the
back-up
servicer would be expected to impose additional servicing fees,
reducing the amounts available for payments on the Notes.
Additionally, transferring these servicing obligations to our
back-up
servicer may result in delays in the processing and recovery of
information with respect to amounts owed on the member loans or,
if the Lending Club platform becomes inoperable, may prevent us
from servicing the member loans and making principal and
interest payments on the Notes. If our
back-up
servicer is not able to service the member loans effectively,
lender members ability to receive principal and interest
payments on their Notes may be substantially impaired.

If we
were to become subject to a bankruptcy or similar proceeding,
the rights of the holders of the Notes could be uncertain, and
payments on the Notes may be limited and suspended or stopped.
The recovery, if any, of a holder on a Note may be substantially
delayed and substantially less than the principal and interest
due and to become due on the Note. Even funds held by Lending
Club in trust for the holders of Notes may potentially be at
risk.

If Lending Club were to become subject to a bankruptcy or
similar proceeding, the recovery, if any, of a holder of a Note
may be substantially delayed in time and may be substantially
less in amount than the principal and interest due and to become
due on the Note. Specifically, the following consequences may
occur:

A bankruptcy or similar proceeding of Lending Club may cause
delays in borrower member payments. Borrower
members may delay payments to Lending Club on account of member
loans because of the uncertainties occasioned by a bankruptcy or
similar proceeding of Lending Club, even if the borrower members
have no legal right to do so, and such delay would reduce, at
least for a time, the funds that might otherwise be available to
pay the Notes corresponding to those member loans.

A bankruptcy or similar proceeding of Lending Club may cause
delays in payments on Notes. The commencement of
the bankruptcy or similar proceeding may, as a matter of law,
prevent Lending Club from making regular payments on the Notes,
even if the funds to make such payments are available. Because a
bankruptcy or similar proceeding may take months or years to
complete, the suspension of payment may effectively reduce the
value of any recovery that a holder of a Note may receive (and
no such recovery can be assured) by the time any recovery is
available.

Interest accruing upon and following a bankruptcy or similar
proceeding of Lending Club may not be paid. In
bankruptcy or similar proceeding of Lending Club, interest
accruing on the Notes during the proceeding may not be part of
the allowed claim of a holder of a Note. If the holder of a Note
receives a recovery on the Note (and no such recovery can be
assured), any such recovery may be based on, and limited to, the
claim of the holder of the Note for principal and for interest
accrued up to the date of the bankruptcy or similar proceeding,
but not thereafter. Because a bankruptcy or similar proceeding
may take months or years to complete, a claim based on principal
and on interest only up to the start of the bankruptcy or
similar proceeding may be substantially less than a claim based
on principal and on interest through the end of the bankruptcy
or similar proceeding.

In a bankruptcy or similar proceeding of Lending Club, there
may be uncertainty regarding whether a holder of a Note has any
priority right to payment from the corresponding member
loan. In a bankruptcy or similar proceeding of
Lending Club, it is possible that a Note could be deemed to have
a priority or exclusive right of payment from some or all
proceeds of the corresponding member loan, in which case the
holder of the Note may not be required to share such proceeds of
the corresponding member loan with other creditors of

Lending Club. Alternatively, to the extent that no such priority
or exclusive right were deemed to exist, the holder of a Note
may be required to share the proceeds of the corresponding
member loan with Lending Clubs other creditors. If such
sharing of proceeds is deemed appropriate, those proceeds that
are either held by Lending Club in the clearing account at the
time of the bankruptcy or similar proceeding of Lending Club, or
not yet received by Lending Club from borrower members at the
time of the commencement of the bankruptcy or similar
proceeding, may be at greater risk than those proceeds that are
already held by Lending Club in the ITF account at the time of
the bankruptcy or similar proceeding. To the extent that
proceeds of the corresponding member loan would be shared with
other creditors of Lending Club, any secured or priority rights
of such other creditors may cause the proceeds to be distributed
to such other creditors before any distribution is made to you
on your Note. For a more detailed description of the clearing
account and the ITF account, see How the Lending Club
Platform Operates  Post-Closing Loan Servicing and
Collection.

In a bankruptcy or similar proceeding of Lending Club, there
may be uncertainty regarding whether a holder of a Note has any
right of payment from assets of Lending Club other than the
corresponding member loan. In a bankruptcy or
similar proceeding of Lending Club, it is possible that a Note
could be deemed to have a right of payment only from proceeds of
the corresponding member loan and not from any other assets of
Lending Club, in which case the holder of the Note may not be
entitled to share the proceeds of such other assets of Lending
Club with other creditors of Lending Club, whether or not, as
described above, such other creditors would be entitled to share
in the proceeds of the member loan corresponding to the Note.
Alternatively, it is possible that a Note could be deemed to
have a right of payment from both the member loan corresponding
to the Note and from some or all other assets of Lending Club,
for example, based upon the automatic acceleration of the
principal obligations on the Notes upon the commencement of a
bankruptcy or similar proceeding, in which case the holder of
the Note may be entitled to share the proceeds of such other
assets of Lending Club with other creditors of Lending Club,
whether or not, as described above, such other creditors would
be entitled to share in the proceeds of the member loan
corresponding to the Note. See Description of the
Notes  Events of Default. To the extent that
proceeds of such other assets would be shared with other
creditors of Lending Club, any secured or priority rights of
such other creditors may cause the proceeds to be distributed to
such other creditors before any distribution is made to you on
your Note.

In a bankruptcy or similar proceeding of Lending Club, there
may be uncertainty regarding the rights of a holder of a Note,
if any, to payment from funds in the clearing
account. If a borrower member has paid Lending
Club on a member loan corresponding to a Note before a
bankruptcy or similar proceeding of Lending Club is commenced,
and those funds are held in the clearing account and have not
been used by Lending Club to make payments on the Note as of the
date the bankruptcy or similar proceeding is commenced, there
can be no assurance that Lending Club will or will be able to
use such funds to make payments on the Note. Other creditors of
Lending Club may be deemed to have rights to such funds that are
equal to or greater than the rights of the holder of the Note.
For a more detailed description of the clearing account, see
How the Lending Club Platform Operates 
Post-Closing Loan Servicing and Collection.

In a bankruptcy or similar proceeding of Lending Club, there
may be uncertainty regarding the rights of a holder of a Note,
if any, to access funds in the ITF account. If a
borrower has paid Lending Club on a member loan corresponding to
a Note before a bankruptcy or similar proceeding of Lending Club
is commenced, and those funds have been used by Lending Club to
make payments on the Note prior to the date the bankruptcy or
similar proceeding is commenced, but the payments on the Note
continue to be held by Lending Club in an ITF account, there can
be no assurance that the holder of the Note will have immediate
access to the funds constituting the payment or that the funds
constituting the payment will ultimately be released to the
holder of the Note. While the Declaration of Trust states that
funds in the ITF account are trust property and are not intended
to be property of Lending Club or subject to claims of Lending
Clubs creditors generally, there can be no assurance that,
if the matter were to be litigated, such litigation would not
delay or prevent the holder of a Note from accessing the portion
of those funds in which the holder has an interest. For a more
detailed description of the ITF account, see How the
Lending Club Platform Operates  Post-Closing Loan
Servicing and Collection.

In a bankruptcy or similar proceeding of Lending Club, there
may be uncertainty regarding the rights of a holder of a Note,
if any, to the return of the purchase price of a Note if the
corresponding member loan has not

been funded. If the purchase price of a Note
is paid to Lending Club and a bankruptcy or similar proceeding
of Lending Club is commenced, the holder of the Note may not be
able to obtain a return of the funds constituting the purchase
price, even if the member loan corresponding to the Note has not
been funded as of the date that the bankruptcy or similar
proceeding is commenced and even if the funds are held by
Lending Club in a ITF account. For a more detailed description
of the funding of member loans, see How the Lending Club
Platform Operates  Purchases of Notes and Loan
Closings.

In a bankruptcy or similar proceeding of Lending Club, the
holder of a Note may be delayed or prevented from enforcing
Lending Clubs repurchase obligations in cases of confirmed
identity fraud. In a bankruptcy or similar
proceeding of Lending Club, any right of a holder of Note to
require Lending Club to repurchase the Note as a result of a
confirmed identity fraud incident may not be specifically
enforced, and such holders claim for such repurchase may
be treated less favorably than a general unsecured obligation of
Lending Club as described and subject to the limitations in this
Risks Related to Lending Club and the Lending Club
Platform  If we were to become subject to a
bankruptcy or similar proceeding section. See
Description of the Notes  Mandatory
Redemption for further information on the repurchase
obligation of Lending Club upon a confirmed identity fraud
incident.

In a bankruptcy or similar proceeding of Lending Club, the
implementation of
back-up
servicing arrangements may be delayed or
prevented. In a bankruptcy or similar proceeding
of Lending Club, our ability to transfer servicing obligations
to our
back-up
servicer may be limited and subject to the approval of the
bankruptcy court or other presiding authority. The bankruptcy
process may delay or prevent the implementation of
back-up
servicing, which may impair the collection of member loans to
the detriment of the Notes.

We
rely on third-party banks to disburse member loan proceeds and
process member loan payments, and we rely on third-party
computer hardware and software. If we are unable to continue
utilizing these services, our business and ability to service
the member loans on which the Notes are dependent may be
adversely affected.

We rely on a third-party bank to disburse member loan amounts.
Additionally, because we are not a bank, we cannot belong to and
directly access the Automated Clearing House (ACH)
payment network, and we must rely on an FDIC-insured depository
institution to process our transactions, including loan payments
and remittances to our Noteholders. We currently use Wells Fargo
Bank, N.A. for these purposes. Under the ACH rules, if we
experience a high rate of reversed transactions (known as
chargebacks), we may be subject to sanctions and
potentially disqualified from using the system to process
payments. We also rely on computer hardware purchased and
software licensed from third parties to operate our platform,
including payment processing software licensed from BankServ.
This hardware and software may not continue to be available on
commercially reasonable terms, or at all. If we cannot continue
to obtain these services, or if we cannot transition to another
service provider quickly, our ability to process payments and
operate the Lending Club platform could suffer, and your receipt
of payments on the Notes could be delayed or impaired.

If the
security of our members confidential information stored in
our systems is breached or otherwise subjected to unauthorized
access, your secure information may be stolen, our reputation
may be harmed, and we may be exposed to liability.

Our platform stores our borrower members and lender
members bank information and other personally-identifiable
sensitive data. Any accidental or willful security breaches or
other unauthorized access could cause your secure information to
be stolen and used for criminal purposes. Security breaches or
unauthorized access to secure information could also expose us
to liability related to the loss of the information,
time-consuming and expensive litigation and negative publicity.
If security measures are breached because of third-party action,
employee error, malfeasance or otherwise, or if design flaws in
our software are exposed and exploited, and, as a result, a
third party or disaffected employee obtains unauthorized access
to any of our members data, our relationships with our
members will be severely damaged, and we could incur significant
liability. Because techniques used to obtain unauthorized access
or to sabotage systems change frequently and generally are not
recognized until they are launched against a target, we and our
third-party hosting facilities may be unable to

anticipate these techniques or to implement adequate
preventative measures. In addition, many states have enacted
laws requiring companies to notify individuals of data security
breaches involving their personal data. These mandatory
disclosures regarding a security breach are costly to implement
and often lead to widespread negative publicity, which may cause
our members to lose confidence in the effectiveness of our data
security measures. Any security breach, whether actual or
perceived, would harm our reputation, and we could lose members.

Our
ability to service the member loans or maintain accurate
accounts may be adversely affected by computer viruses, physical
or electronic break-ins and similar disruptions.

The highly-automated nature of the Lending Club platform may
make it an attractive target and potentially vulnerable to
computer viruses, physical or electronic break-ins and similar
disruptions. If a computer hacker were able to infiltrate the
Lending Club platform, you would be subject to an increased risk
of fraud or borrower identity theft, and you may not receive the
principal or interest payments that you expect to receive on any
Notes you were fraudulently induced to purchase. Hackers might
also disrupt the accurate processing and posting of payments to
accounts such as yours on the platform, or cause the destruction
of data and thereby undermine your rights to repayment of the
Notes you have purchased. While we have taken steps to prevent
hackers from accessing the Lending Club platform, if we are
unable to prevent hacker access, your ability to receive the
principal and interest payments that you expect to receive on
Notes you purchase and our ability to fulfill our servicing
obligations and to maintain the Lending Club platform would be
adversely affected.

Any
significant disruption in service on our website or in our
computer systems could reduce the attractiveness of our platform
and result in a loss of members.

If a catastrophic event resulted in a platform outage and
physical data loss, our ability to perform our servicing
obligations would be materially and adversely affected. The
satisfactory performance, reliability and availability of our
technology and our underlying network infrastructure are
critical to our operations, level of customer service,
reputation and ability to attract new members and retain
existing members. Our system hardware is hosted in a hosting
facility located in Santa Clara, CA, owned and operated by
SAVVIS. We also maintain a real time backup system located in
Washington, D.C. SAVVIS does not guarantee that our
members access to our website will be uninterrupted,
error-free or secure. Our operations depend on SAVVISs
ability to protect their and our systems in their facilities
against damage or interruption from natural disasters, power or
telecommunications failures, air quality, temperature, humidity
and other environmental concerns, computer viruses or other
attempts to harm our systems, criminal acts and similar events.
If our arrangement with SAVVIS is terminated, or there is a
lapse of service or damage to SAVVIS facilities, we could
experience interruptions in our service as well as delays and
additional expense in arranging new facilities. Any
interruptions or delays in our service, whether as a result of
SAVVIS or other third-party error, our own error, natural
disasters or security breaches, whether accidental or willful,
could harm our relationships with our members and our
reputation. Additionally, in the event of damage or
interruption, our insurance policies may not adequately
compensate us for any losses that we may incur. Our disaster
recovery plan has not been tested under actual disaster
conditions, and we may not have sufficient capacity to recover
all data and services in the event of an outage at a SAVVIS
facility. These factors could prevent us from processing or
posting payments on the member loans or the Notes, damage our
brand and reputation, divert our employees attention,
reduce our revenue, subject us to liability and cause members to
abandon the Lending Club platform, any of which could adversely
affect our business, financial condition and results of
operations.

Competition
for our employees is intense, and we may not be able to attract
and retain the highly skilled employees whom we need to support
our business.

Competition for highly skilled technical and financial personnel
is extremely intense. We may not be able to hire and retain
these personnel at compensation levels consistent with our
existing compensation and salary structure. Many of the
companies with which we compete for experienced employees have
greater resources than we have and may be able to offer more
attractive terms of employment.

In addition, we invest significant time and expense in training
our employees, which increases their value to competitors who
may seek to recruit them. If we fail to retain our employees, we
could incur significant expenses in

hiring and training their replacements and the quality of our
services and our ability to serve Lending Club members could
diminish, resulting in a material adverse effect on our business.

Our
growth could strain our personnel resources and infrastructure,
and if we are unable to implement appropriate controls and
procedures to manage our growth, we may not be able to
successfully implement our business plan.

Our growth in headcount and operations since our inception has
placed, and will continue to place, to the extent that we are
able to sustain such growth, a significant strain on our
management and our administrative, operational and financial
reporting infrastructure.

Our success will depend in part on the ability of our senior
management to manage the growth we achieve effectively. To do
so, we must continue to hire, train and manage new employees as
needed. If our new hires perform poorly, or if we are
unsuccessful in hiring, training, managing and integrating these
new employees, or if we are not successful in retaining our
existing employees, our business may be harmed. To manage the
expected growth of our operations and personnel, we will need to
continue to improve our operational and financial controls and
update our reporting procedures and systems. The addition of new
employees and the system development that we anticipate will be
necessary to manage our growth will increase our cost base,
which will make it more difficult for us to offset any future
revenue shortfalls by reducing expenses in the short term. If we
fail to successfully manage our growth, we will be unable to
execute our business plan.

If we
fail to retain our key personnel, we may not be able to achieve
our anticipated level of growth and our business could
suffer.

Our future depends, in part, on our ability to attract and
retain key personnel. Our future also depends on the continued
contributions of our executive officers and other key technical
personnel, each of whom would be difficult to replace. In
particular, Renaud Laplanche, our Founder and Chief Executive
Officer, and John Donovan, our Chief Operating Officer, are
critical to the management of our business and operations and
the development of our strategic direction. The loss of the
services of Mr. Laplanche, Mr. Donovan or other
executive officers or key personnel and the process to replace
any of our key personnel would involve significant time and
expense and may significantly delay or prevent the achievement
of our business objectives.

It may
be difficult and costly to protect our intellectual property
rights, and we may not be able to ensure their
protection.

Our ability to maintain the Lending Club platform and arrange
member loans depends, in part, upon our proprietary technology,
including our proprietary LendingMatch system. We have applied
for patent protection for LendingMatch. We may not protect our
proprietary technology effectively, however, which would allow
competitors to duplicate our products and adversely affect our
ability to compete with them. A third party may attempt to
reverse engineer or otherwise obtain and use our proprietary
technology without our consent. In addition, the Lending Club
platform may infringe upon claims of third-party patents, and we
may face intellectual property challenges from such other
parties. We may not be successful in defending against any such
challenges or in obtaining licenses to avoid or resolve any
intellectual property disputes. Furthermore, our technology may
become obsolete, and there is no guarantee that we will be able
to successfully develop, obtain or use new technologies to adapt
the Lending Club platform to compete with other person-to-person
lending platforms as they develop. If we cannot protect our
proprietary technology from intellectual property challenges, or
if the platform becomes obsolete, our ability to maintain the
platform, arrange member loans or perform our servicing
obligations on the member loans could be adversely affected.

Purchasers
of Notes will have no control over Lending Club and will not be
able to influence Lending Club corporate matters.

We are not offering any equity in this offering. Purchasers of
Notes offered through the Lending Club platform will have no
equity interest in Lending Club and no ability to vote on or
influence Lending Club corporate decisions. As a result, our
stockholders will continue to exercise 100% voting control over
all Lending Club corporate matters,

The
Lending Club platform is a novel approach to borrowing that may
fail to comply with borrower protection laws such as state usury
laws, other interest rate limitations or federal and state
consumer protection laws such as the Truth in Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Reporting Act and
the Fair Debt Collection Practices Act and their state
counterparts. Borrower members may make counterclaims regarding
the enforceability of their obligations after collection actions
have commenced, or otherwise seek damages under these laws.
Compliance with such regimes is also costly and
burdensome.

The Lending Club platform operates a novel program that must
comply with regulatory regimes applicable to all consumer credit
transactions. The novelty of our platform means compliance with
various aspect of such laws is untested. Certain state laws
generally regulate interest rates and other charges and require
certain disclosures. In addition, other state laws, public
policy and general principles of equity relating to the
protection of consumers, unfair and deceptive practices and debt
collection practices may apply to the origination, servicing and
collection of the member loans. Our platform is also subject to
other federal and state laws, such as:



the federal
Truth-in-Lending
Act and Regulation Z promulgated thereunder, and similar
state laws, which require certain disclosures to borrower
members regarding the terms of their member loans;



the federal Equal Credit Opportunity Act and Regulation B
promulgated thereunder, which prohibit discrimination on the
basis of age, race, color, sex, religion, marital status,
national origin, receipt of public assistance or the exercise of
any right under the Consumer Credit Protection Act, in the
extension of credit;



the federal Fair Credit Reporting Act, which regulates the use
and reporting of information related to each borrower
members credit history; and



the federal Fair Debt Collection Practices Act and similar state
debt collection laws, which regulate debt collection practices
by debt collectors and prohibit debt collectors from
engaging in certain practices in collecting, and attempting to
collect, outstanding consumer loans.

We may not always have been, and may not always be, in
compliance with these laws. Compliance with these requirements
is also costly, time-consuming and limits our operational
flexibility. See About Lending Club  Government
Regulation for more information regarding governmental
regulation of the Lending Club platform.

Noncompliance
with laws and regulations may impair our ability to arrange or
service member loans.

Generally, failure to comply with the laws and regulatory
requirements applicable to our business may, among other things,
limit our, or a collection agencys, ability to collect all
or part of the principal amount of or interest on the member
loans on which the Notes are dependent and, in addition, could
subject us to damages, revocation of required licenses or other
authorities, class action lawsuits, administrative enforcement
actions, and civil and criminal liability, which may harm our
business and ability to maintain the Lending Club platform and
may result in borrower members rescinding their member loans.

Where applicable, we seek to comply with state small loan, loan
broker, servicing and similar statutes. Currently, we do not
provide services to borrowers in Idaho, Indiana, Iowa, Maine,
North Carolina and North Dakota. In all other
U.S. jurisdictions with licensing or other requirements we
believe may be applicable to make loans, we have obtained any
necessary licenses or comply with the relevant requirements.
Nevertheless, if we are found to not comply with applicable
laws, we could lose one or more of our licenses or
authorizations or face other sanctions, which may have an
adverse effect on our ability to continue to arrange member
loans through the platform, perform our servicing obligations or
make the Lending Club platform available to borrower members in
particular states, which may impair your ability to receive the
payments of principal and interest on your Notes that

you expect to receive. See About Lending Club 
Government Regulation for more information regarding
governmental regulation of the Lending Club platform.

We
rely on our agreement with WebBank to lend to qualified borrower
members on a uniform basis throughout the United States. If our
relationship with WebBank were to end, we may need to rely on
individual state lending licenses to arrange member
loans.

Borrower member loan requests take the form of an application to
WebBank, which cooperates with us to lend to qualified Lending
Club borrower members and allows our platform to be available to
borrowers on a uniform basis throughout the United States,
except that we do not currently offer member loans in Idaho,
Indiana, Iowa, Maine, North Carolina and North Dakota. If
our relationship with WebBank were to end, we may need to rely
on individual state lending licenses to arrange member loans.
Because we do not currently possess state lending licenses in
every U.S. state, we may be required to discontinue lending
or limit the rates of interest charged on member loans in some
states. We may face increased costs and compliance burdens if
our agreement with WebBank terminated.

Several
lawsuits have sought to recharacterize certain loan marketers
and other originators as lenders. If litigation on similar
theories were successful against us, member loans originated
through the Lending Club platform could be subject to state
consumer protection laws in a greater number of
states.

Several lawsuits have brought under scrutiny the association
between high-interest payday loan marketers and
out-of-state
banks. These lawsuits assert that payday loan marketers use
out-of-state
lenders in order to evade the consumer protection laws imposed
by the states where they do business. Such litigation has
sought, successfully in some instances, to recharacterize the
loan marketer as the lender for purposes of state consumer
protection law restrictions. Similar civil actions have been
brought in the context of gift cards. We believe that our
activities are distinguishable from the activities involved in
these cases.

Additional state consumer protection laws would be applicable to
the member loans originated through the Lending Club platform if
we were recharacterized as a lender, and the member loans could
be voidable or unenforceable. In addition, we could be subject
to claims by borrower members, as well as enforcement actions by
regulators. Even if we were not required to cease doing business
with residents of certain states or to change our business
practices to comply with applicable laws and regulations, we
could be required to register or obtain licenses or regulatory
approvals that could impose a substantial cost on us. To date,
no actions have been taken or threatened against us on the
theory that we have engaged in unauthorized lending. However,
such actions could have a material adverse effect on our
business.

As
Internet commerce develops, federal and state governments may
draft and propose new laws to regulate Internet commerce, which
may negatively affect our business.

As Internet commerce continues to evolve, increasing regulation
by federal and state governments becomes more likely. Our
business could be negatively affected by the application of
existing laws and regulations or the enactment of new laws
applicable to social lending. The cost to comply with such laws
or regulations could be significant and would increase our
operating expenses, and we may be unable to pass along those
costs to our members in the form of increased fees. In addition,
federal and state governmental or regulatory agencies may decide
to impose taxes on services provided over the Internet. These
taxes could discourage the use of the Internet as a means of
consumer lending, which would adversely affect the viability of
the Lending Club platform.

Our
legal compliance burdens and costs will significantly increase
as a result of operating as a public company following the date
of this prospectus. Our management will be required to devote
substantial time to compliance matters.

After the date of this prospectus, we will become a public
company and will incur significant legal, accounting and other
expenses that we did not incur as a private company. Our
management and other personnel will need to devote a substantial
amount of time to public company compliance requirements.
Moreover, these rules and regulations will increase our legal
and financial compliance costs and will make some activities
more time-

consuming and costly. For example, these rules and regulations
may make it more expensive for us to obtain director and officer
liability insurance coverage and more difficult for us to
attract and retain qualified persons to serve as directors or
executive officers.

In addition, the Sarbanes-Oxley Act requires, among other
things, that we maintain effective internal control over
financial reporting and disclosure controls and procedures. In
particular, for the year ending March 31, 2010, we must
perform system and process evaluation and testing of our
internal control over financial reporting to allow management
and our independent registered public accounting firm to report
on the effectiveness of our internal controls over financial
reporting, as required by Section 404 of the Sarbanes-Oxley
Act. Our testing, or the subsequent testing by our independent
registered public accounting firm, may reveal deficiencies in
our internal control over financial reporting that are deemed to
be material weaknesses. In order to comply with
Section 404, we may incur substantial accounting expense,
expend significant management time on compliance-related issues,
and hire additional accounting and financial staff with
appropriate public company experience and technical accounting
knowledge. Moreover, if we are not able to comply with the
requirements of Section 404 in a timely manner, or if we or
our independent registered public accounting firm identify
deficiencies in our internal control over financial reporting
that are deemed to be material weaknesses, we could be subject
to sanctions or investigations by the SEC or other regulatory
authorities, which would require additional financial and
management resources.

If we
are unable to successfully address the material weaknesses in
our internal control over financial reporting or otherwise
maintain effective internal control over financial reporting,
our ability to report our financial results on a timely and
accurate basis may be adversely affected.

On June 6, 2008, our independent registered public
accounting firm issued a letter to the Company informing us
that, as of March 31, 2007 and 2008, respectively, the
Company did not maintain effective controls over the corporate
financial reporting process due to an insufficient complement of
personnel with a level of accounting knowledge, experience and
training in the application of generally accepted accounting
principles commensurate with the Companys corporate
financial reporting requirements.

Based upon that written communication, our Chief Executive
Officer and our Vice President of Finance and Administration
concurred with the assessment contained in that written
communication. Beginning with the first quarter of fiscal 2009,
we have initiated corrective actions to remediate each of our
material weaknesses in internal controls over financial
reporting. Specifically, in July 2008 we hired an accounting
manager to perform our daily accounting functions, and we have
purchased additional accounting research tools that will allow
our senior accounting personnel to research complex accounting
issues effectively, independently from our auditors. As of the
date of this prospectus, our management believes that we have
remedied each of the material weaknesses in internal controls
over financial reporting. However, we cannot be certain that
these measures will result in our ability to maintain adequate
controls over our corporate financial processes and reporting in
the future. If these actions are not successful in addressing
these material weaknesses or if we identify additional material
weaknesses in the future, our ability to report our financial
results on a timely and accurate basis may be adversely affected.

If we
are required to register under the Investment Company Act, our
ability to conduct our business could be materially adversely
affected.

The Investment Company Act of 1940, or the Investment
Company Act, contains substantive legal requirements that
regulate the manner in which investment companies
are permitted to conduct their business activities. We believe
we have conducted, and we intend to continue to conduct, our
business in a manner that does not result in our company being
characterized as an investment company. If, however, we are
deemed to be an investment company under the Investment Company
Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which would
materially adversely affect our business, financial condition
and results of operations. If we were deemed to be an investment
company, we may also attempt to seek exemptive relief from the
SEC, which could impose significant costs and delays on our
business.

We may not actually achieve the plans, intentions or
expectations disclosed in forward-looking statements, and you
should not place undue reliance on forward-looking statements.
Actual results or events could differ materially from the plans,
intentions and expectations disclosed in forward-looking
statements. We have included important factors in the cautionary
statements included in this prospectus, particularly in the
Risk Factors section, that could cause actual
results or events to differ materially from forward-looking
statements contained in this prospectus. Forward-looking
statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or
investments we may make.

You should read this prospectus and the documents that we have
filed as exhibits to the registration statement, of which this
prospectus is a part, completely and with the understanding that
actual future results may be materially different from what we
expect. We do not assume any obligation to update any
forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.

Lending Club is an Internet-based social lending platform that
enables its borrower members to borrow money and its lender
members to purchase Member Payment Dependent Notes, the proceeds
of which fund loans made to individual borrower members. Our
motto is Better Rates. Together. We operate in the
space known as social lending. As of June 30,
2008, we had 57,820 registered members and had facilitated the
issuance of $17.8 million in member loans. Through our
participation in the Lending Club platform as a lender, as of
June 30, 2008 we have funded approximately
$8.6 million of this $17.8 million total. All member
loans originated through the Lending Club platform are unsecured
and have three-year terms. Although we initially permitted
member loans to have principal amounts as low as $500, all
member loans currently originated through the Lending Club
platform have original principal amounts between $1,000 and
$25,000. As of June 30, 2008, the average aggregate Lending
Club loan to a single borrower member was approximately $8,461.

We aim to operate our platform at low cost to offer interest
rates to our borrower members lower than the rates they could
obtain through credit cards or traditional banks and to offer
interest rates to lender members on Notes that lender members
find attractive. Our lending platform operates online only. Our
registration, processing and payment systems are automated and
electronic. We encourage the use of electronic payments as the
preferred means to disburse member loan proceeds and remit cash
payments on outstanding member loans. We have no physical
branches, no deposit-taking and interest payment activities and
extremely limited loan underwriting activities.

We generate revenue by charging borrower members loan
origination fees and by charging lender members ongoing
servicing charges relating to the Notes they have purchased. As
our operations ramped up during the fiscal year ended
March 31, 2008, and before we temporarily stopped accepting
lender member commitments, loan origination volumes grew
rapidly, with $1.1 million originated in our fiscal quarter
ended September 30, 2007, $4.4 million in our fiscal
quarter ended December 31, 2007 and $10.1 million in
our fiscal quarter ended March 31, 2008. During the fiscal
quarter ended June 30, 2008, origination volume was
$2.9 million. Of this $2.9 million in loans originated
in this period, we funded approximately $2.0 million though
our participation in the platform as a lender.

We have positioned ourselves in the social lending market as a
platform for higher quality borrowers. To borrow on our
platform, borrower members must have:



a minimum FICO score of 640;



a debt-to-income ratio (excluding mortgage) below 25%; and



a credit report showing no current delinquencies, recent
bankruptcies, collections or open tax liens and reflecting



at least four accounts ever opened;



at least three accounts currently open;



no more than 10 credit inquiries in the past six months;



utilization of credit limit not exceeding 100%; and



a minimum credit history of 12 months

A borrower members debt-to-income ratio is calculated by
Lending Club based on (i) the debt (excluding mortgage)
reported by a consumer reporting agency; and (ii) the
income reported by the borrower member. As described below, we
verify a borrower members income in approximately 25% of
cases. See About the Loan Platform  How the
Lending Club Platform Operates  Minimum Credit
Criteria and Underwriting below, where the concepts of
FICO,
debt-to-income
ratio, delinquency, recent bankruptcy, collections, open tax
liens, credit inquiries and utilization of credit limit are
discussed in detail. Lending Club preserves the anonymity of our
borrower and lender members, in that lender members and borrower
members do not know, and are not permitted to obtain, each
others actual names and addresses. Lending Club members
conduct transactions using Lending Club

screen names. During our member registration process, we verify
the identity of members by comparing supplied information
against the records of a consumer reporting agency. We also
currently require verification of bank accounts. See About
the Loan Platform  How the Lending Club Platform
Operates  New Member Registration below, where
our registration procedures are discussed.

We offer member loans through our platform to borrower members
throughout the United States, except that we do not currently
offer member loans in Idaho, Indiana, Iowa, Maine, North
Carolina and North Dakota. Because we collect small fees from
thousands of members, no single borrower member or lender member
has accounted for more than 0.1% of our revenue during our
fiscal year ended March 31, 2008 or any subsequent fiscal
quarter.

Borrower members who use our platform must identify their
intended use of member loan proceeds in their initial loan
request. As of June 30, 2008, among funded member loans,
borrower members identified their intended use of loan proceeds
as follows:



refinancing high-interest credit card debt (approximately 54%);



one-time events, such as weddings, home improvements or medical
expenses (approximately 33%); and



financing their home-based or small businesses (approximately
13%).

We do not verify or monitor a borrower members actual use
of funds following the funding of a member loan.

We attract members to our website, www.lendingclub.com, through
a variety of sources. We drive traffic through referrals from
other parties (which include online communities, social networks
and marketers), through search engine results and through online
and offline advertising. We are not dependent on any one source
of traffic to our website. As of June 30, 2008, our website
was receiving approximately 55,000 unique visitors per month.

The
Online Social Lending Industry

Online social lending is a new approach to consumer finance.
Social lending uses an Internet-based network to connect
borrower and lender members. The provider of the lending
platform, in our case Lending Club, generally provides
transactional services for the online network, including
screening borrowers for borrowing eligibility and facilitating
payments. A social lending platform allows borrower and lender
members to connect with each other using a combination of
financial and social criteria. Online social lending also
entails significantly lower operating costs compared to
traditional banking and commercial finance institutions because
there are no physical branches and related infrastructure, no
deposit-taking and interest payment activities and extremely
limited loan underwriting activities. We believe that the
interest rates offered to our borrower members through the
Lending Club platform are better than the rates those borrower
members would pay on outstanding credit card balances or an
unsecured loan from a bank, if they were able to obtain such a
loan.

As an early participant in the development of online social
lending, Lending Club views consumer finance delivered through
an online social platform as an important new market
opportunity. Key drivers of social lending include the following:



the possibility of lower interest rates for borrower members;



the possibility of attractive interest rates for lender members;



the possibility for all members to help each other by
participating in the platform to their mutual benefit;

growing acceptance of the Internet as an efficient and
convenient forum for consumer transactions.

How the
Lending Club Platform Operates

New
Member Registration

The first step in using our platform is new member registration.
New members first register as general Lending Club members.
During registration, members establish online member screen
names. New members must agree to the terms and conditions of the
Lending Club website, including agreeing to conduct transactions
and receive

disclosures and other communications electronically. Next, new
members have the opportunity to register as borrower members or
lender members. Members may also choose to register as both
borrowers and lenders. All Lending Club borrower members:



must be U.S. citizens or permanent residents;



must be at least 18 years old;



must have valid email accounts;



must have U.S. social security numbers; and



must have an account at a financial institution with a routing
transit number.

During borrower and lender registration, we verify the identity
of members by comparing supplied names, social security numbers,
addresses and telephone numbers against the names, social
security numbers, addresses and telephone numbers in the records
of a consumer reporting agency, as well as other anti-fraud and
identity verification databases. We also currently require each
new member to supply information about the members bank
account including routing numbers, after which we transfer a few
cents from the bank account into the members newly created
Lending Club sub-account to verify that the bank account belongs
to the member. Members must then sign in to Lending Club and
verify their bank accounts based on the amounts transferred.

During lender registration, potential lender members must agree
to a credit profile authorization statement for identification
purposes and a tax withholding statement, and must enter into a
note purchase agreement with Lending Club, which will govern all
purchases of Notes the lender member makes through our platform.
See About the Loan Platform  Note Purchase
Agreement for a detailed description of the note purchase
agreement.

Likewise, during borrower registration, potential borrower
members must agree to a credit profile authorization statement
and bank account authorization.

Borrower members must also enter into a borrower agreement with
Lending Club. The borrower agreement addresses the registration
and loan request processes. In this agreement, the borrower
member authorizes us to obtain a consumer report, to use the
consumer report for specific purposes and to share certain
information about the borrower member with lender members. The
borrower member also grants us a limited power of attorney to
complete on the borrower members behalf, one or more
promissory notes in the amounts and on the terms made to the
borrower member by WebBank.

Borrower members also enter into a loan agreement with WebBank.
In the loan agreement, the borrower member authorizes WebBank to
obtain and use a consumer report on the borrower member. The
loan agreement addresses the application process and the role of
lender members commitments to purchase Notes corresponding
to the borrower loan. The agreement explains that Lending Club
may, but is not obligated to, agree to fund all or a portion of
a loan to the borrower member. If a loan is extended to the
borrower member, the borrower member agrees to be bound by the
terms of a promissory note, the form of which is attached as an
exhibit to the agreement. The agreement also addresses fees and
terms related to a loan and default. The borrower member
authorizes WebBank to debit the borrower members
designated account by ACH transfer for each payment due under
the promissory note. The loan agreement also describes the
parties rights in regard to arbitration. The borrower
member agrees that WebBank may assign its right, title and
interest in the loan agreement and the borrower members
promissory notes to Lending Club.

Borrower
Loan Requests

Borrower members submit loan requests online through the Lending
Club website. Loan requests must be between $1,000 and $25,000.
Each loan request is an application to WebBank, which lends to
qualified Lending Club borrower members and allows our platform
to be available to borrower members on a uniform basis
throughout the United States, except that we do not currently
facilitate member loans in Idaho, Indiana, Iowa, Maine, North
Carolina and North Dakota. WebBank is an FDIC-insured,
state-chartered industrial bank organized under the laws of Utah
that serves as the lender for all member loans originated
through our platform.

Currently, we allow borrower members to have up to two Lending
Club member loans outstanding at any one time, if the borrower
member continues to meet our credit criteria. In addition, to
apply for a second Lending Club member loan, the borrower member
must have already made timely payments on the first member loan
for at least six months. If a borrower member applies for a
second Lending Club member loan, we do not make any notation in
the loan listing to indicate the borrower members first
member loan, except that the borrower members total
indebtedness, as reported in the credit report, will reflect the
level of debt incurred from the previous loan.

Borrower members supply a variety of unverified information that
is included in the borrower member loan listings on our website.
This information includes a borrower members stated social
affiliations (such as educational affiliations), home ownership
status, job title, employer and tenure. This information also
includes a borrower members income, which generally is
unverified. If we verify the borrower members income, we
will display an icon in the loan listing indicating that we have
done so. Lender members have no ability to verify borrower
member information. See About the Loan
Platform  How the Lending Club Platform
Operates  Loan Postings and Borrower Member
Information Available on the Lending Club Website.

Minimum
Credit Criteria and Underwriting

After we receive a loan request, we evaluate whether the
prospective borrower member meets the credit criteria agreed
upon with WebBank established for the member loans. The credit
policy agreed upon with WebBank provides the underwriting
criteria for all loans originated through our platform, and the
credit policy may not be changed without the consent of WebBank.
Under the credit policy, prospective borrower members must have:



a minimum FICO score of 640 (as reported by a consumer reporting
agency);



a debt-to-income ratio (excluding mortgage) below 25%, as
calculated by Lending Club based on (i) the debt (excluding
mortgage) reported by a consumer reporting agency; and
(ii) the income reported by the borrower member, which we
verify in approximately 25% of cases; and



a credit profile (as reported by a consumer reporting agency)
without any current delinquencies, recent bankruptcy,
collections or open tax liens and reflecting:



at least four accounts ever opened;



at least three accounts currently open;



no more than 10 credit inquiries in the past six months;



utilization of credit limit not exceeding 100%; and



a minimum credit history of 12 months.

For purposes of the credit policy:



debt-to-income ratio means the
borrowers aggregate monthly payment in respect of debt
obligations appearing on the borrowers credit report,
other than those secured by real estate, divided by the
borrowers monthly income, as reported by the borrower;



current delinquency means a payment
obligation of the borrower appearing on the borrowers
credit report that is 30 or more days late at the time the
borrower applies for a member loan on the Lending Club platform;



recent bankruptcy means a bankruptcy, as
indicated by a credit report, that occurred less than seven
years before the date the borrower applies for a member loan on
the Lending Club platform;



collection means that a collections agency
has reported an outstanding debt obligation of the borrower to
the consumer reporting agency and that the collection amount
remains open at the date the borrower applies for a member loan
on the Lending Club platform;



open tax lien means a lien recorded by a tax
authority appearing on the borrowers credit report that
has not been released by the applicable tax authorities;

open account means any credit account that
the borrower can currently utilize reported in the
borrowers credit report;



credit inquiry means an instance recorded in
the borrowers credit report in which a lender has
requested a copy of the borrowers credit report in
response to the borrowers request for a new credit
facility or an extension of an existing one;



utilization of credit limit means the ratio
obtained by dividing the outstanding indebtedness of a borrower
by the total indebtedness authorized under all of the
borrowers open credit lines, as reported on the
borrowers credit report. It is possible for utilization of
credit limit to exceed 100% in the event a borrower borrows to
the limit of all open credit lines and interest accrues and is
capitalized before the borrower makes any repayments; and



credit history means the time elapsed since
the borrower first opened a credit account, as reported on the
borrowers credit report.

A FICO score is a numeric rating that ranges between 300 and 850
that rates a persons credit risk based on past credit
history and current credit situation. FICO scoring was developed
by Fair Isaac Corporation. FICO scores reflect a mathematical
formula that is based on information in a borrowers credit
report, compared to information on other consumers. Consumers
with higher scores typically represent a lower risk of
defaulting on their loans. There are three different FICO
scores, each with a separate name, which correspond to each of
the three main U.S. consumer reporting agencies. Equifax
uses the BEACON score; Experian uses the
Experian/Fair Isaac Risk Model; and TransUnion uses
the EMPIRICA score. The score from each consumer
reporting agency considers only the credit data available to
that agency. Fair Isaac Corporation develops all three FICO
scores and makes the scores as consistent as possible across the
three consumer reporting agencies. Nevertheless, the three
agencies sometimes have different information about a particular
borrower member, and that means the three FICO scores for that
borrower member will vary by agency. We currently obtain
consumer credit information from a single consumer reporting
agency, although we may use other consumer reporting agencies in
the future.

As made available by Fair Isaac Corporation as of June 30,
2008 on its website, myfico.com, consumers in the United States
are distributed among FICO scores as follows:

Percentage of

United States

FICO

Consumers

300-499

2

%

500-549

5

%

550-599

8

%

600-649

12

%

650-699

15

%

700-749

18

%

750-799

27

%

800-850

13

%

The FICO scoring model takes into account the information in a
consumers credit report, with different kinds of
information carrying differing weights. The FICO scoring model
takes into account five categories of data:



historical timeliness of bill payments, with most recent
activity given the most emphasis (35% of the FICO score);



total outstanding debt and the total amount of credit the
consumer has available, with consumers who consistently borrow
to their credit limits having their scores reduced (30%);



length of credit history, with consumers with long credit
histories with the same lenders having their scores increased
(15%);



mix of credit, with consumers with a variety of revolving credit
(such as credit cards) and installment credit (such as car
loans) having the highest scores (10%); and

new credit applications, with consumers who have higher numbers
of credit applications generally having their scores reduced
(10%).

FICO scores do not consider:



age;



race;



sex;



job or length of employment, including military status;



income;



education;



marital status;



whether the consumer has been turned down for credit;



length of time at current address;



whether the consumer owns a home or rents; and



information not contained in the consumers credit report.

After obtaining authorization from the borrower member, by
arrangement with WebBank we obtain a credit report from a
consumer reporting agency to determine if the borrower member
meets the three criteria explained in detail above: a minimum
FICO score of 640; a debt-to-income ratio (excluding mortgage)
below 25%, as calculated by Lending Club based on (i) the
debt (excluding mortgage) reported by a consumer reporting
agency; and (ii) the income reported by the borrower
member, which we verify in approximately 25% of cases; and a
credit profile (as reported by a consumer reporting agency)
without any current delinquencies, recent bankruptcy,
collections or open tax liens and reflecting at least four
accounts ever opened, at least three accounts currently open, no
more than 10 credit inquiries in the past six months,
utilization of credit limit not exceeding 100% and a minimum
credit history of 12 months.

From our inception until June 30, 2008, during a time in
which we applied somewhat different and less restrictive
criteria than we will following the date of this prospectus,
only 13.1% of individuals seeking member loans on our site have
had the credit score and lack of delinquencies required to post
their loan requests on our website. See About Lending
Club  Business  Prior Operation of the
Lending Club Platform. During the loan application
process, we also automatically screen borrower members using
U.S. Department of the Treasury Office of Foreign Asset
Control lists, as well as our fraud detection systems. See
About Lending Club  Business 
Technology  Fraud Detection.

After submission of the application, we inform potential
borrowers whether they qualify to post a loan request on our
platform. Potential borrowers then must enter into a borrower
agreement with Lending Club and a loan agreement with WebBank.
These agreements set forth the terms and conditions of the
member loans and allow a borrower member to withdraw from a loan
request at any time before the member loan is funded. See
About the Loan Platform  How the Lending Club
Platform Operates  New Member Registration.

As of March 31, 2008, when we applied somewhat different
and less restrictive criteria, we were receiving approximately
4,000 borrower loan requests per month, of which approximately
600 qualified to be posted on the Lending Club website. See
About Lending Club  Business  Prior
Operation of the Lending Club Platform. After
April 7, 2008, we reduced our marketing efforts. We are
currently receiving about 1,500 borrower requests per month.

For borrower members that qualify, pursuant to the credit policy
we assign one of 35 loan grades, from A1 through G5, to
each loan request, based on the borrowers FICO score,
requested loan amount, currently open accounts, number of credit
inquiries in the past six months, utilization of credit limit
and length of credit history. Applying these grading criteria,
the following factors lead to a loan request being more likely
to be designated grade

A1: higher credit score; lower requested loan amount; fewer
credit inquiries; fewer open accounts, given a minimum of six
open accounts; utilization of credit limit between 5% and 85%;
and greater length of credit history.

Specifically, we use the following six-step grading process to
assign sub-grades.

First, using the FICO credit score, we assign each loan into an
initial base sub-grade. Base sub-grades are assigned as follows:

Sub-Grade

FICO

A1

770-850

A2

747-769

A3

734-746

A4

723-733

A5

714-733

B1

707-713

B2

700-706

B3

693-699

B4

686-692

B5

679-685

C1

675-678

C2

671-674

C3

668-670

C4

664-667

C5

660-663

D1

656-659

D2

652-655

D3

648-651

D4

644-647

D5

640-643

Second, we modify the sub-grade according to the borrowers
members currently open accounts (as reported by a consumer
reporting agency). Sub-grade modifications based on currently
open accounts (as reported by a consumer reporting agency) are
as follows:

Third, we modify the sub-grade based on the borrower
members number of credit inquiries in the last
six months (as reported by a consumer reporting agency).
Sub-grade modifications based on the number of credit inquiries
in the last six months (as reported by a consumer reporting
agency) are as follows:

Sub-Grade

Number of Credit Inquiries in Last Six Months

Modifier

0-3

0

4

(1

)

5

(2

)

6

(4

)

7

(6

)

8

(10

)

9

(14

)

10

(20

)

11 or more

Decline

Fourth, we modify the sub-grade based on the borrower
members utilization of his or her credit limit. Sub-grade
modifications based on utilization of credit limit are as
follows:

Sub-Grade

Utilization of Credit Limit

Modifier

Less than 5.00%

(1

)

5.00%-84.99%

0

85.00%-89.99%

(1

)

90.00%-94.99%

(2

)

95.00%-97.99%

(4

)

98.00%-99.99%

(8

)

100.00% or greater

Decline

Fifth, we modify the sub-grade based on length of the borrower
members credit history. Sub-grade modifications based
length of credit history are as follows:

Sixth and finally, we modify the sub-grade based on ratio of the
requested loan amount to the Lending Club pre-determined
guidance limit. Guidance limits are as follows:

Guidance

Loan Grade

Limit

A

$

15,000

B

$

12,500

C

$

10,000

D

$

7,000

E

$

4,000

F

$

3,000

G

$

2,000

Sub-grade modifications based on guidance limits are as follows:

Sub-Grade

Loan Amount/Guidance Limit

Modifier

0%-24%

0

25%-49%

(1

)

50%-74%

(2

)

75%-99%

(3

)

100%-124%

(4

)

125%-149%

(5

)

150%-174%

(6

)

175%-199%

(8

)

200%-224%

(10

)

225%-249%

(12

)

250%-274%

(14

)

275%-299%

(16

)

300%+

(18

)

By adding the modifiers to the initial sub-grade, we arrive at
the final sub-grade.

For example, assume a borrower member requests a $5,000 loan,
and the borrower member has a FICO score of 700, 10 open
accounts, four credit inquiries in the last six months, 50%
utilization of credit limit and more than 60 months of
credit history. We would first assign this borrower a B2
sub-grade because the borrowers FICO is 700. Next, we
would make no sub-grade modification for open accounts, because
10 open accounts is greater than 5 and less than 22. We would
then lower the borrower members initial B2 base sub-grade
one level based on four credit inquiries in the last six months,
because four credit inquiries in the last six months results in
a one level reduction in sub-grade. We would make no sub-grade
modification for 50% utilization of credit limit, since it is
greater than 5% but less than 85%, and we would make no
sub-grade modification for length of credit history, because the
borrower member has more than 60 months of credit history.
Because the requested loan amount, $5,000, is between
25-49% of
the guidance limit of $12,500 for B loan grades, we would
further lower the sub-grade one level due to the difference
between the loan amount and the guidance limit; $5,000 is 40% of
$12,500. This loan request would therefore ultimately be lowered
two sub-grades from B2 to B4.

E, F and G grades can only be assigned to a member loan as
a result of downward sub-grade adjustments based on the
requested loan amount and the credit report metrics described
above: currently open accounts, number of credit inquiries in
the past six months, utilization of credit limit and length of
credit history.

Borrower
Financial Information is Generally Unverified

As discussed above, borrower member information presented in
loan listings is generally unverified. In contrast to the
information provided by a consumer reporting agency and the
requested loan amount, as described above regarding our loan
grading criteria, lender members should not rely on unverified
information provided by borrower members.

Additionally, we generally do not verify a borrower
members ability to repay a member loan the borrower member
has requested. For example, we do not review paystubs,
IRS Forms W-2,
federal or state income tax returns, bank and savings account
balances, retirement account balances, letters from employers,
home ownership or rental records, car ownership records or any
records related to past bankruptcy and legal proceedings.

From time to time, however, we verify a borrowers
employment and income by requiring the borrower to submit
paystubs, IRS
Forms W-2
or other tax records between the initial posting of a loan
request and any funding of a member loan. We currently perform
such income and employment verifications for approximately 25%
of loan requests that proceed past the initial credit check
stage and are posted on the website. We perform these employment
and income verifications only at the time a borrower member
posts a loan request, before the loan request is funded. We do
not perform any income or employment verifications following
member loan funding. When we perform these verifications, we
contact borrower members by email or telephone to request
additional information. An icon appears in borrower loan
listings to indicate whether we have verified the borrower
members income.

As of June 30, 2008, we perform targeted income
verification primarily in the following situations:



If we believe there may be uncertainty about the borrower
members employment or future income. For example, the
borrower member fails to state an employment or source of
income; the stability of the borrower members future
income or employment status appears to be in question (based,
for example, on self-reported loan description); or a borrower
member has control over the accuracy of the information, such as
being a principal of the company providing the employment or
income information.



If we detect conflicting or unusual information in the loan
request.



If the loan amount is high.



If the borrower member is highly leveraged.



If we suspect the borrower member may have obligations not
included in the borrower members pre-loan or post-loan
debt level, such as wage garnishment collection accounts. Or,



If we suspect fraud.

We also conduct random testing. From time to time, we also
randomly select listings to verify information for the purpose
of testing our policies and for statistical analysis.

If the borrower member fails to provide satisfactory information
in response to an income or employment verification inquiry, we
may remove the borrower members loan listing or request
additional information from the borrower member.

From the period from our inception to June 30, 2008, of the
borrower members undergoing income and employment verification:



approximately 45% have provided us with satisfactory responses;



approximately 5% have provided information that failed to verify
their stated information, and we removed those borrower
members loan postings; and



approximately 50% failed to respond to our request or responded
stating that they did not wish to provide information, and we
removed those borrower members loan postings.

We conduct income and employment verification entirely in our
discretion as an additional credit and fraud screening
mechanism. We believe that our ability to verify a borrower
members income may be useful in certain circumstances in
screening our platform against exaggerated income and employment
representations from borrower members. Lender members, however,
should not rely on a borrower members stated employment or
income, except when such income or employment has been verified
as indicated on the loan details page, or on Lending Clubs
ability to perform income and employment verifications. We
cannot assure lender members that we will continue performing
income and employment verifications. We expect that the
percentage of loan postings for which we conduct income and
employment verifications will decline as our volumes increase.
See Risk Factors  Information supplied by
borrower members may be inaccurate or intentionally false.

Our participation as a lender on the platform has had, and will
continue to have, no effect on our income and employment
verification process, the selection of loan requests verified or
the frequency of income and employment verification.

Interest
Rates

After a loan requests loan grade has been determined under
the credit policy pursuant to our agreement with WebBank, an
interest rate is assigned to the loan request. Interest rates
currently range between 7.37% and 18.86%. The interest rates are
assigned to borrower loan grades in three steps. First, the
Lending Club base rates are determined. Second, an assumed
default rate is determined that attempts to project loan default
rates. Third, the assumed default rate is used to calculate an
upward adjustment to the base rates, which we call the
Adjustment for Risk and Volatility.

The base rates are set by the interest rate working group. This
group generally meets on a weekly basis and includes our Chief
Executive Officer; Chief Operations Officer; Director, Credit;
Vice President, Collections; and Director, Product Strategy. The
working groups objective in setting the Lending Club base
rates is to allocate the interest rate spread that exists
between the cost of credit for borrower members and the return
on bank deposits we understand are available to lender members.
We have selected this spread as an appropriate starting place
for our base rates for the following reasons:



For borrower members, we believe the interest rate for unsecured
consumer credit published by the Federal Reserve reflects the
average interest rate at which our borrower members could
generally obtain other financing. We believe that the difference
between that interest rate and the base rate is a relevant
measure of the savings that may be achieved by our borrower
members.



For lender members, we believe the interest rate on certificates
of deposit reflects a widely available risk-free alternative
investment for our lender members. We believe the difference
between that interest rate and the base rate is a relevant
measure of the value that may be delivered to our lender members.

By setting the initial allocation of the base rate near the
middle of the spread between these two interest rates, we
believe roughly equal value may be provided to both our borrower
members and our lender members. To make this initial base rate
calculation, the working group calculates the average between
the interest rate for unsecured consumer credit published by the
Federal Reserve, commercial banks; all accounts, in
Federal Reserve Statistical Release G19, and the interest rate
for 6-month
certificates of deposit, secondary market; monthly,
published by the Federal Reserve in Federal Reserve Statistical
Release H15.

Next, the working group modifies this initial allocation, based
on the following factors:



general economic environment, taking into account economic
slowdowns or expansions;



the balance of supply and demand on the Lending Club platform,
taking into account whether borrowing requests exceed lender
member commitments or vice versa; and



competitive factors, taking into account the rates set by other
social lending platforms and the rates set by major financial
institutions.

The working group adjusts the Lending Club base rates from time
to time based on this methodology. In applying the adjustment to
the base rate, the working group has established a different
base rate for A grades than for other loan grades.

When the working group set our current base rate on June 3,
2008, effective June 17, 2008, the interest rate for
unsecured consumer credit published by the Federal Reserve,
commercial banks; all accounts, in Federal Reserve
Statistical Release G19 was 13.71%, and the average interest
rate on
6-month
certificates of deposit, secondary market; monthly,
published by the Federal Reserve in Federal Reserve Statistical
Release H15 was 2.84%. The average of these two interest rates
was 8.27% (calculated as (13.71% + 2.84%)/2 = 8.27%). Applying
the adjustments described above, the working group determined an
adjustment of -1.22% for A loan grades and -0.47% for other loan
grades. Therefore, the working group set the Lending Club base
rate as 7.05% for A loan grades and 7.80% for other loan grades.

After the working group sets the Lending Club base rates, we
determine assumed default rates. The assumed default rate
reflects Lending Clubs attempt to project the default rate
for member loans of the loan grade. The 35 sub-

grades, from A1 to G5, were obtained by dividing the difference
between the assumed default rate of sub-grade A1 and the assumed
default rate of sub-grade G5 into 35 equal intervals and
assigning a sub-grade to each interval.

Lastly, the working group adjusts the base rates upward to
reflect an adjustment correlated to the assumed default rate,
which we call the Adjustment for Risk and
Volatility. Currently, the working group has set this
adjustment as an interest rate equal to twice the assumed
default rate. Accordingly, to determine the final interest rates
that apply on the Lending Club platform, the working group adds
twice the assumed default rate to the base rates.

Set forth below is a chart describing the interest rates
currently assigned to member loans for each of the Lending Club
loan grades:

The interest rate working group has adjusted the Lending Club
base rate from time to time in the past and will continue to do
so. When the working group makes adjustment to our base rate, we
will supplement this prospectus and will file a post-effective
amendment to the registration statement of which this prospectus
forms a part.

Illustration
of Service Charge and Annual Returns For Fully Performing Loans
of Each Sub-Grade and For Sub-Grades Based on the Assumed
Default Rate

The following table illustrates hypothetical annual return
information with respect to the Notes, grouped by Lending Club
sub-grade. The information in this table is not based on actual
results for lender members and is presented only to illustrate
the effects by sub-grade on hypothetical annual Note returns of
Lending Clubs 1.00% service charge and an assumed default
rate. By column, the table presents:



loan sub-grades;



the annual stated interest rate;



the hypothetical annual returns on Notes if no defaults were to
occur and the member loans were to perform fully without any
late payments or collections, before Lending Clubs service
charge;



the reduction in the annual return of the hypothetical full
performance result due to Lending Clubs 1.00% service
charge on both interest and principal payments;



the hypothetical annual returns on Notes assuming full
performance, net of Lending Clubs service charge;

All Lending Club member loans are unsecured obligations of
individual borrowers with a fixed interest rate and three-year
maturity. Member loans have an amortizing, monthly repayment
schedule and may be repaid in whole or in part at any time
without prepayment penalty. In the case of a partial prepayment,
we automatically recalculate the amortization schedule over the
remainder of the three-year term, and the borrower members
required monthly payment is correspondingly reduced. See
About the Loan Platform  Description of the
Notes.

Loan
Postings and Borrower Member Information Available on the
Lending Club Website

Once a loan request is complete and we have assigned a loan
grade and interest rate to the requested loan, the request is
subsequently posted on our website and then becomes available
for viewing by lender members. Lender members are also then able
to commit to buy Notes that will be dependent for their payments
on that member loan. Loan requests appear under Lending Club
screen names, not actual names. Lender members are able to view:



the requested loan amount;



loan grade (determined using the process described above),
interest rate and annual percentage rate for the member loan;

the borrower members self-reported income and whether that
income has been verified by Lending Club;



the borrower members self-reported, unverified social
affiliations;



total funding that has been committed to date to Notes that will
be dependent on the loan;



the number of lender members committed to funding Notes that
will be dependent on the member loan; and



the borrower members self-reported intended use of funds.

Borrower members who use our platform must identify their
intended use of their loans. As of June 30, 2008, among
funded member loans, borrower members identified their intended
use of loan proceeds as follows:



refinancing high-interest credit card debt (approximately 54%);



one-time events, like weddings, home improvements or medical
expenses (approximately 33%); and



financing their home-based or small businesses (approximately
13%).

Potential borrowers typically state the use of funds in a short
sentence or clause, such as Consolidate my credit card
debt and be rid of it. We historically have not verified
and do not plan in the future to verify or monitor a borrower
members actual use of funds.

Borrower members may also list social affiliations. One basic
affiliation listed for every borrower member is the borrower
members home state, which is based on the borrower
members verified address. Borrower members may also choose
to list an affiliation with a company, educational institution
or association. We do not verify these additional stated
affiliations, and borrower members are not required to list them.

Lender members are also able to view the following information
provided by borrower members, which we do not verify:

debt-to-income ratio (excluding mortgage), as calculated by
Lending Club based on (i) the debt (excluding mortgage)
reported by a consumer reporting agency; and (ii) the
income reported by the borrower member, which we verify in
approximately 25% of cases.

We also post the following credit history information from the
consumer reporting agency report, and label the information as
being provided by a credit bureau:



a numerical range of between 2 and 80 points within which the
borrower members FICO score falls, as set forth in the
discussion of loan grade above;



the borrower members earliest credit line;



the borrower members number of open credit lines;



the borrower members total number of credit lines;



the borrower members revolving credit balance;



the borrower members revolving line utilization;



the number of credit inquiries received by the consumer
reporting agency with regard to the borrower member within the
last six months;



the number of reported delinquencies in the past two
years; and



the length of time (in months) since the borrower members
last reported delinquency.

Although borrower members and lender members are anonymous to
each other, lender members may post questions on the loan
listing and borrower members have the opportunity, but are not
required, to post public responses. We do not verify these
responses.

Loan requests remain open for 14 days, during which time
funding commitments to purchase Notes that will be dependent on
the loans may be made by lender members unless funding
commitments for Notes aggregating the loan request amount are
received earlier, in which case the member loan is funded as
soon as practicable.

How to
Purchase Notes

After a loan request has been posted on the Lending Club
website, individual lender members who have registered with
Lending Club may commit to purchase Notes dependent on the
member loan requested by the borrower member.

Lender members navigate our website as follows. Lender members
may browse all active loan listings. They may also use search
criteria to narrow the list of loan listings they are viewing.
The available search criteria include loan grade, borrower
member credit score, number of recent delinquencies and loan
funding status, as well as a free-search field. The free-search
field returns results based on the word entered as the search.
As lender members browse the loan listings, they can click on
any of the listings to view additional detail. The loan detail
page includes general information about the borrower member and
the loan request that is viewable by non-members, and more
detail (including credit data) viewable only by signed-in lender
members. Once signed-in, lender members may select any of the
displayed loan listings and add them to their order,
which is akin to a shopping basket. Lender members may add as
many member loans as they want to their order, provided that the
aggregate amount of their order does not exceed the funds
available in their Lending Club customer accounts. Once a lender
member has finished building an order, the lender member may
click the check out button, review the
order one more time and then click the confirmation
button to commit funds to the order. Funds committed represent
binding commitments to purchase Notes issued by us that are
dependent on the chosen member loans for payment. From that
point on, the funds committed by the lender member are no longer
available in the lender members Lending Club account and
may no longer be withdrawn or committed to other loans (unless
and until loans included in the order are not funded, in which
case the corresponding funds become available to the lender
member again).

A single borrower members loan request is typically funded
by Notes purchased by many different lender members. For
example, as of March 31, 2008, during the period in which
lender members purchased loans directly instead of Notes
dependent on loans, the average aggregate loan size was
approximately $9,100 and the average

funding commitment per lender per loan was approximately $75.
Notes are available in a minimum denomination of $25, and in $25
increments thereafter. In the event that a borrower
members loan request does not attract Note purchase
commitments sufficient to provide full funding for the member
loan, the borrower member ceases to be under an obligation to
accept the loan, although borrowers may still choose to accept
partial funding of their loan requests or may request that their
loan requests be re-listed on the Lending Club platform. For the
fiscal year ended March 31, 2008, among borrower members
whose loan requests were only partially committed:



approximately 18% chose to accept partial funding;



approximately 48% chose to re-list their loan requests; and



approximately 34% chose to decline partial funding and not
relist their loan requests.

LendingMatch

In making loan purchase commitments under our prior structure,
roughly 50% of lender members used Lending Clubs
LendingMatch system, a proprietary search engine
that creates a sample listing of Notes responsive to search
criteria based on the lender members target weighted
average interest rate for the lender members portfolio.

The following steps are involved in a lender members use
of LendingMatch:



The lender member indicates the aggregate principal amount of
Notes that the lender member wishes to purchase, which we refer
to as a portfolio, and a target weighted average
interest rate of the Notes comprising the portfolio.



LendingMatch then displays a risk level associated
with the selected weighted average interest rate. The risk level
is a number between 1 and 5 and is calculated by LendingMatch
applying a proprietary formula. The calculation that
LendingMatch performs assumes an initial search result from the
loan requests currently available on the platform.



The lender member can then modify the desired weighted average
interest rate and the total principal amount for the portfolio
and monitor in real time how that modification impacts the risk
level number of between 1 and 5.



Once the lender member is satisfied with the chosen criteria,
the lender member can submit a query for LendingMatch to present
potential Notes that match the lender members criteria.



The sample portfolio presented by LendingMatch contains a list
of Notes and displays the total principal amount of each Note,
the amount the lender member would invest in each Note if the
member chooses to spread Note purchases evenly among the various
member loans on which the Notes are dependent, the interest rate
and the maturity date of each member loan on which the Notes are
dependent. Self-reported social connections, if any, are also
displayed. By changing the input criteria, a lender member can
repeat the request for a sample portfolio and view a new
portfolio.



Once presented with a sample portfolio, a lender member can
choose to make modifications to the sample portfolio by removing
Notes, adding new Notes or changing the amount of each Note
purchased. Historically, about 10% of the 50% of lender members
who have used LendingMatch when making funding commitments have
purchased the sample portfolio without making modifications,
with the other 90% modifying either the composition or the
amount purchased in respect of each member loan reflected in the
sample portfolio or both.



The lender member then submits the desired portfolio, gets a
confirmation page and selects confirm in order to
buy the portfolio or go back to make further
modifications or cancel the portfolio altogether.



If a loan request forming part of the portfolio is cancelled,
either by Lending Club or by the borrower member, and the loan
will not be available, lender members will be offered the
opportunity to substitute a new loan request for the cancelled
request. In this event, LendingMatch will present lender members
with the option to replace the cancelled loan request with
another loan request of the same risk grade or a less risky

risk grade. Thus, a B5 loan would be replaced with the option to
designate funding for another B5 loan and, if no B5 loan were
available, a B4 loan, and if no B4 loan were available, a B3
loan, and so forth.

Lenders may also browse loan requests or sort them using search
criteria without using LendingMatch. These search criteria
include interest rate, FICO score, debt-to-income ratio
(calculated as described above), delinquencies in the last two
years and percentage of the loan request already funded by Note
commitments. Lenders may also search loan requests using
keywords (such as a city or institution).

Loan
Funding and Treatment of Lender Member Balances

A lender members commitment to purchase a Note dependent
on a member loan is a binding commitment, subject only to
receipt of aggregate Note purchase commitments equal to the
total loan request amount or, if the total loan request amount
is not fully met by lender member Note purchase commitments or
Lending Club, a borrower members decision to accept
partial funding. In order to make Note purchase commitments,
lender members must have sufficient funds in their Lending Club
accounts. This is accomplished by having each lender member
authorize an electronic transfer using the Automated Clearing
House, or ACH, network from the lender members designated
and verified bank account to the account currently maintained by
Lending Club at Wells Fargo Bank, N.A. in trust for
our lender members. This so-called ITF account is a
pooled account titled in our name in trust for
Lending Club lender members. The ITF account is a non-interest
bearing demand deposit account.

Funds in the ITF account will always be maintained at an FDIC
member financial institution. Individual Lending Club members
have no direct relationship with Wells Fargo Bank, N.A. We are
the trustee for the ITF account. In addition to outlining the
rights of lender members, the declaration of trust provides that
we disclaim any economic interest in the assets in the ITF
account and also provides that each lender member disclaims any
right, title or interest in the assets of any other lender
member in the ITF account. No Lending Club monies are ever
commingled with the assets of lender members in the ITF account.

Under the ITF account, we maintain sub-accounts for each of our
lender members on our platform to track and report funds
committed by lender members to purchase Notes dependent on
member loans, as well as payments received from borrower
members. These record-keeping sub-accounts are purely
administrative and reflect balances and transactions concerning
the funds in the ITF account.

The ITF account are FDIC-insured on a pass through
basis to the individual lender members, subject to applicable
limits. This means that each individual lender members
balance is protected by FDIC insurance, up to the aggregate
amounts established by the FDIC. Other funds the lender member
has on deposit with Wells Fargo Bank, N.A., for example, may
count against the FDIC insurance limits.

Funds of a lender member may stay in the ITF account
indefinitely. Such funds may include funds in the lender
members sub-account never committed to purchase Notes or
committed to the purchase of Notes for which the underlying
member loan did not close and payments received from Lending
Club related to Notes previously purchased. Upon request by the
lender member, we will transfer lender member funds in the ITF
account to the lender members designated and verified bank
account by ACH transfer, provided such funds are not already
committed to the future purchase of Notes.

Purchases
of Notes and Loan Closings

Once a lender member has decided to purchase one or more Notes
that are dependent on member loans and prefunded the lender
members Lending Club account with sufficient cash, we
proceed with the purchase and sale of the Notes to the lender
member and facilitate the closing of the corresponding member
loans. Upon issuing a Note to a lender member and registering
the Note on our books and records, we transfer the principal
amount of such Note from such lender members sub-account
under the ITF account to a funding account maintained by
WebBank. This transfer represents the payment by the lender
member of the purchase price for the Note. These proceeds are
designated for the funding of the particular member loan
selected by the lender member. WebBank is the lender for all
member loans to borrower members, which allows our platform to
be available on a uniform basis to borrower members throughout
the United States, except that we do not currently offer member
loans in Idaho, Indiana, Iowa, Maine, North Carolina and North
Dakota. We are obligated to maintain sufficient funds in the
funding account

maintained by WebBank to satisfy the daily projected member loan
closings. WebBank disburses the loan proceeds to the borrower
member who is receiving the member loan. An individual member
loan generally closes the first business day after we receive
Note funding commitments in an aggregate amount equal to the
total amount of the loan request, or when the borrower member
agrees to take a lesser amount equal to the amount of Note
commitments received up to that time.

The borrower member executes an electronic loan agreement in
favor of WebBank. At the closing of the borrower members
loan, we execute an electronic promissory note on the borrower
members behalf for the final loan amount under a power of
attorney on behalf of the borrower member. WebBank then
electronically indorses the promissory note to Lending Club and
assigns the borrower members loan agreement to Lending
Club without recourse to WebBank. Borrowers also electronically
execute a borrower agreement in which they grant us the power of
attorney to execute their promissory note and agree to have us
service their member loan, among other things.

The promissory note and the loan agreement contain customary
agreements and covenants requiring the borrower members to repay
their member loans and acknowledging Lending Clubs role as
servicer for all the member loans. Borrowers authorize WebBank
to disburse the loan proceeds by ACH transfer.

Lender members know only the screen names, and do not know the
actual names, of borrower members. The actual names and mailing
addresses of the borrower members are known only to us and
WebBank. We maintain custody of the electronically-executed
promissory notes in electronic form on our platform.

Borrowers pay us an origination fee upon successful closing of
the member loan. WebBank deducts the origination fee from the
loan amount prior to disbursing the net amount to the borrower
member and remits the fee to us. This fee is determined by the
loan grade of the loan and currently ranges from 0.75% to 3.00%
of the aggregate principal amount, as set forth in the chart
below:

Lending Club

Loan Grade

Origination Fee

A

0.75

%

B

1.50

%

C

2.00

%

D

2.50

%

E

3.00

%

F

3.00

%

G

3.00

%

Identity
Fraud Reimbursement

We reimburse lender members for the unpaid principal balance of
a Note that is dependent on a member loan obtained through
identity fraud. We generally recognize the occurrence of
identity fraud upon receipt of a police report regarding the
identity fraud. This reimbursement for identity fraud only
provides an assurance that our borrower identity verification is
accurate; in no way is it a guarantee of a borrowers
self-reported information (beyond the borrowers identity)
or a borrower members creditworthiness. We expect the
incidence of identity fraud on our platform to be low because of
our identity verification process. As of June 30, 2008, we
had experienced two cases of confirmed identity fraud. In both
cases, we received a police report from the victim of the
identity fraud, evidencing that identity fraud had occurred.
Following our receipt of those police reports, we reimbursed the
lender members who had funded those member loans for the
outstanding principal amount of those member loans.

Post-Closing
Loan Servicing and Collection

Following the purchase of Notes and the closing of the
corresponding member loans, we begin servicing the member loans.

We assess lender members a service charge in respect of their
Notes. Our service charge is equal to an amount corresponding to
1.00% of the following amounts received by Lending Club from
borrower members in respect of

each corresponding member loan (in each case excluding any
payments due to Lending Club on account of portions of the
corresponding member loan, if any, funded by Lending Club in its
capacity as a lender on the platform):



principal;



interest; and



late fees.

Our procedures generally involve the automatic debiting of
borrower bank accounts by ACH transfer, with payment by check
only allowed in exchange for a 5% increase in the borrower
members applicable interest rate. Such funds are
transferred to a clearing account in our name where they remain
for four days or until the amounts clear, whichever is shorter.
Thereafter, we make payments on the Notes by transferring the
appropriate funds to the ITF account and allocating amounts
received on specific member loans to the appropriate lender
members sub-account. We transfer amounts due to us for
servicing and borrower loans we hold from the clearing account
to another operating account of ours. A lender member may
transfer uncommitted funds out of the lender members
Lending Club sub-account in the ITF account by ACH to the lender
members designated bank account at any time, subject to
normal execution times for such transfers (generally
2-3 days).

We disclose on our website to the relevant lender members and
report to consumer reporting agencies regarding borrower
members payment performance on Lending Club member loans.
We have also made arrangements for collection procedures in the
event of borrower member default. When a member loan is past due
and payment has not been received, we contact the borrower
member to request payment. After a
15-day grace
period, we may, in our discretion, assess a late payment fee.
The amount of the late payment fee is the greater of 5.00% of
the unpaid installment amount, or $15, or such lesser amount as
may be provided by applicable law. This fee may be charged only
once per late payment. Amounts equal to any late payment fees we
receive are paid to holders of the Notes dependent on the
relevant member loans, net of our service charge. We often
choose not to assess a late payment fee when a borrower promises
to return a delinquent loan to current status and fulfills that
promise. See About the Loan Platform 
Historical Information about Our Borrower Members and
Outstanding Loans.

Each time a payment request is denied due to insufficient funds
in the borrowers account or for any other reason, we may
also assess an unsuccessful payment fee to the borrower in an
amount of $15 per unsuccessful payment, or such lesser amount as
may be provided by applicable law. We retain 100% of this
unsuccessful payment fee to cover our costs incurred because of
the denial of the payment.

If a member loan becomes 31 days overdue, we identify the
loan on our website as Late (31-120), and we either
refer the member loan to an outside collection agency, currently
Collection Bureau Hudson Valley, Inc., or to our in-house
collections department. Amounts equal to any recoveries we
receive from the collection process are payable to lenders on a
pro rata basis, subject to our deduction of our 1.00% service
charge and an additional collection fee. The lender member is
only charged the additional collection fee if the collections
agency or Lending Club are able to collect a payment. These
fees, which are a percentage of the amount recovered, are listed
below:



15% if a member loan is 30  60 days past due;



10% if a member loan is 61  90 days past due;



7% if a member loan is 91  120 days past due;



25% if a member loan is more than 120 days past
due; and



30% in the event of litigation.

Lender members are able to monitor the status of collections as
the status of a member loan switches from Late
(15-30 days)
to Late
(31-120)
to current for example, but cannot participate in or
otherwise intervene in the collection process.

If a borrower member dies while a member loan in is repayment,
we require the executor or administrator of the estate to send a
death certificate to us. We then file a claim against the
borrower members estate to attempt to recover the
outstanding loan balance. Depending on the size of the estate,
we may not be able to recover the

outstanding amount of the loan. If the estate does not include
sufficient assets to repay the outstanding member loan, we will
treat the loan as defaulted with zero value. In addition, if a
borrower member dies near the end of the term of a member loan,
it is unlikely that any further payments will be made on the
Notes corresponding to such member loan, because the time
required for the probate of the estate may extend beyond the
initial maturity date and the final maturity date of the Notes.

Our normal collection process changes in the event of a borrower
member bankruptcy filing. When we receive notice of the
bankruptcy filing, as required by law, we cease all automatic
monthly payments on the member loan. We also defer any other
collection activity. The status of the member loan, which the
relevant lender members may view, switches to
bankruptcy. We next determine what we believe to be
an appropriate approach to the members bankruptcy. If the
proceeding is a Chapter 7 bankruptcy filing, seeking
liquidation, we attempt to determine if the proceeding is a
no asset proceeding, based on instructions we
receive from the bankruptcy court. If the proceeding is a
no asset proceeding, we take no further action and
assume that no recovery will be made on the member loan.

In all other cases, Lending Club will file a proof of claim
involving the borrower member. The decision to pursue additional
relief beyond the proof of claim in any specific matter
involving a Lending Club borrower member will be taken entirely
within our discretion and will depend upon certain factors
including:



if the borrower member used the proceeds of a Lending Club
member loan in a way other than that which was described the
borrower members loan application;



if the bankruptcy is a Chapter 13 proceeding, whether the
proceeding was filed in good faith and if the proposed plan
reflects a best effort on the borrower members
behalf; and



our view of the costs and benefits to Lending Club of any
proposed action.

Participation
in the Funding of Loans by Lending Club and Its
Affiliates

Prior to April 7, 2008, we experienced situations where
qualified loan requests were not being fully committed to by our
lender members. Furthermore, during the period from
April 7, 2008 until the date of this prospectus, no
qualified borrowing requests were funded through funding
commitments from lender members because we were not offering
funding opportunities to the public during this time. To address
these situations, we have funded portions of certain member loan
requests, using the proceeds of credit facilities we have
obtained from outside financing sources. As of March 31,
2008, we had funded $7.0 million of loan requests, and as
of June 30, 2008, we had funded approximately
$8.6 million of loan requests. Although we have no
obligation to do so, we may fund portions of loan requests in
the future.

Our affiliates, including our executive officers, directors and
shareholders, also have funded portions of member loans requests
from time to time in the past, and may do so in the future. As
of June 30, 2008, our affiliates had funded $460,850 of
loan requests.

Trading
System

Lender members may not transfer their Notes except through the
resale trading system operated
by ,
a registered broker-dealer. This trading system is an
internet-based trading system on which Lending Club lender
members who establish a brokerage relationship with the
registered broker-dealer operating the trading system may offer
their Notes for sale. In this section, we refer to lender
members who have established such brokerage relationships as
subscribers. Only transactions involving resales of
previously issued Notes will be effected through the trading
system; the trading system will not handle any aspect of
transactions involving the initial offer and sale of Notes by
Lending Club. Subscribers may post orders to sell their Notes on
the trading system at prices established by the subscriber.
Other subscribers will have the opportunity to view these
prices, along with historical information from the original loan
posting for the member loan corresponding to the Note, an
updated credit score range of the borrower member and the
payment history for the Note.

Lending Club is not a registered national securities exchange,
securities information processor, clearing agency, broker,
dealer or investment adviser. All securities services relating
to the trading system are provided
by ,
a registered broker-dealer. Neither Lending Club
nor
will make any recommendations with

respect to transactions on the trading system. There is no
assurance that lender members will be able to establish a
brokerage relationship with the registered broker-dealer.
Furthermore, Lending Club cannot assure subscribers that they
will be able to sell notes they offer for resale through the
trading system at the offered price or any other price nor can
Lending Club offer any assurance that the trading system will
continue to be available to subscribers.

Customer
Support

We provide customer support to our borrowers and lenders. For
most Lending Club members, their experience is entirely
web-based. We include detailed frequently asked
questions (FAQs) on our website. We also post
detailed fee information and the full text of our member legal
agreements.

We make additional customer support available to members by
email and phone. Our customer support team is located at our
headquarters in Sunnyvale, California.

Historical
Information about Our Borrower Members and Outstanding
Loans

As of June 30, 2008, Lending Club had facilitated 2,103
member loans with an average original principal amount of $8,461
and an aggregate original principal amount of $17,793,500, out
of which $16,566,225 had been outstanding for more than
45 days and had been through at least one billing cycle.
Out of these loans that had been through at least one billing
cycle, 97.82% were current, 0.58% were 15 to 30 days late,
1.36% were more than 30 days late, and 0.24% were
defaulted. A member loan is considered as having defaulted when
at least one payment is more than 120 days late.

The 0.24% of defaulted loans as of June 30, 2008 were
comprised of six member loans, equaling a total defaulted amount
of $52,860. Of these six defaulted loans, four were loans that
became 120 days late, equaling $37,481 in defaulted amount,
and two were loans in which the borrower member filed for a
Chapter 7 bankruptcy seeking liquidation, equaling $15,379
in defaulted amount.

From the period from our inception until June 30, 2008, the
total number of loans that had ever entered late status,
including the 0-15 days late grace period, was 273. Of
these 273 member loans, 171 subsequently became more than
15 days late and qualified to have a late fee assessed. We
assessed late fees in respect of 39 of these 171 member loans,
resulting in late fee assessments totaling $585.

The following table presents aggregated information about
borrower members and their loans for the period from
May 24, 2007 to June 30, 2008, grouped by the Lending
Club loan grade assigned by Lending Club:

The following table presents aggregated information for the
period from May 24, 2007 to June 30, 2008
self-reported by borrower members at the time of their loan
applications, grouped by the Lending Club loan grade assigned by
Lending Club. Lending Club has not independently verified this
information:

The following table presents aggregated information for the
period from May 24, 2007 to June 30, 2008 reported by
a consumer reporting agency about Lending Club borrower members
at the time of their loan applications, grouped by the Lending
Club loan grade assigned by Lending Club. As used in this table,
Delinquencies in Last Two Years means the number of
30+ days past-due incidences of delinquency in the borrower
members credit file for the past two years. See
About the Loan Platform  How the Lending Club
Platform Operates  Minimum Credit Criteria and
Underwriting for a more detailed discussion of
delinquencies. Lending Club has not independently verified this
information:

The following table presents additional aggregated information
for the period from May 24, 2007 to June 30, 2008
about delinquencies, default and borrower prepayments, grouped
by the Lending Club loan grade assigned by Lending Club. The
interest rate, default and delinquency information presented in
the table includes data only for member loans that had been
issued for more than 45 days as of June 30, 2008, and
therefore have been through at least one billing cycle. With
respect to late member loans, the following table shows the
entire amount of the principal remaining due (not just that
particular payment). The second and fourth columns show the late
member loan amounts as a percentage of member loans issued for
more than 45 days. Member loans are considered defaulted
and when they become 120 days late. The data presented in
the table below comes from a set of member loans that have been
outstanding, on average, for approximately six months.

Because of our limited operating history, the data in the
following table regarding loss experience may not be
representative of the loss experience we expect will develop
over time as additional member loans are originated through the
Lending Club platform and the member loans already originated
through our platform have longer payment histories. In addition,
because of our limited operating history, the data in the
following table regarding prepayments may not be representative
of the prepayments we expect over time as additional member
loans are originated through the Lending Club platform and the
member loans already originated through our platform have longer
payment histories.

We will use the proceeds of each series of Notes to fund a
member loan through the Lending Club platform designated by the
lender members purchasing such series of Notes. See About
the Loan Platform for more information.

Plan of
Distribution

We will offer the Notes to our lender members at 100% of their
principal amount. The Notes will be offered only by Lending Club
through the Lending Club website, and there will be no
underwriters or underwriting discounts. See About the Loan
Platform for more information.

Description
of the Notes

General

The Notes will be issued in series under an indenture to be
entered into between Lending Club and Wells Fargo Bank, National
Association.

Each series of Notes will correspond to one borrower member
loan. All Notes will be U.S. dollar denominated, fully
amortizing and have a fixed rate of interest. The Notes of each
series will have a stated interest rate that is the same as the
interest rate for the corresponding borrower member loan and an
aggregate stated principal amount equal to the lender
members aggregate commitment to purchase Notes the
proceeds of which they have designated to fund the corresponding
member loan.

Notwithstanding the foregoing, Lending Club has no obligation to
make any payments on the Notes unless, and then only to the
extent that, Lending Club has received payments on the
corresponding member loan, as described below under
 Payments on the Notes. The Notes will
also be subject to prepayment without penalty under certain
circumstances as described below under
 Prepayments.

Notes of each series will have an initial term of three years
and four business days, which is four business days longer than
the term of the corresponding member loan. The four business
days allow us to assure the finality of the transfer of funds
under the ACH rules after we receive payments from borrower
members. If there are amounts owing to Lending Club in respect
of the corresponding member loan at the initial maturity of a
Note, the holder of that Note will have the option to extend the
term of his or her Note by 120 days, which we refer to as
the final maturity, to allow the holder to receive
any payments that Lending Club receives on the corresponding
member loan after the maturity of the corresponding member loan.
Following the final maturity of a Note, the holder of that Note
will have no rights to receive any further payments from Lending
Club.

The indenture will not limit the aggregate principal amount of
Notes that Lending Club can issue under the indenture, but each
series of Notes will be effectively limited to a maximum
principal amount of $25,000, which is the largest possible
initial principal amount of a member loan. If in the future
Lending Club changes the maximum amount of a permitted borrower
loan request, then the maximum aggregate principal amount of
Notes per series would also increase. The aggregate principal
amount of Notes of each series will equal the aggregate amount
of funds designated by lender members to fund the corresponding
member loan. When Lending Club funds some or all of a member
loan, no Notes will be issued to Lending Club for the amounts of
the member loan that Lending Club determines to fund itself.

We will use all proceeds we receive from purchases of the Notes
to purchase the corresponding member loans from WebBank.

Ranking

The Notes will not be contractually senior or contractually
subordinated to any other indebtedness of Lending Club. The
Notes will be unsecured special, limited obligations of Lending
Club. Lending Club will be obligated to pay principal and
interest on each Note in a series only if and to the extent that
Lending Club receives principal, interest or late fee payments
from the borrower member on the corresponding member loan funded
by the proceeds of that series, and such borrower member loan
payments will be shared ratably among all Notes of the series
after

deduction of Lending Clubs service charge and any
payments due to Lending Club on account of the portions of the
member loan, if any, funded by Lending Club in its capacity as a
lender on the platform. In the event of a bankruptcy or similar
proceeding of Lending Club, the relative rights of the holder of
a Note as compared to the holders of other unsecured
indebtedness of Lending Club with respect to payment from the
proceeds of the member loan corresponding to that Note or other
assets of Lending Club is uncertain. If Lending Club were to
become subject to a bankruptcy or similar proceeding, the holder
of a Note will have an unsecured claim against Lending Club that
may or may not be limited in recovery to the corresponding
borrower member loan payments.

The indenture will not contain any provisions that would limit
Lending Clubs ability to incur indebtedness in addition to
the Notes.

Payments
and Paying Agents

Subject to the limitations described below under
Limitations on Payments, Lending Club will make
payments of principal and interest on the Notes within four
business days of receiving Member Loan Payments (as defined
below) in respect of the corresponding member loan, in
accordance with the payment schedule for each Note. Each Note
will have a payment schedule providing 36 monthly payments
on payment dates that fall four business days following the due
date for each installment of principal and interest on the
corresponding member loan. The extra four business days allow us
to assure the finality of the transfer of funds under the ACH
rules after we receive payments from borrowers.

The stated interest rate on each Note will be the same as the
interest rate on the corresponding member loan and interest will
be computed and will accrue on the Note in the same manner as
the interest on the corresponding member loan is computed and
accrues. The Service Charge described below will reduce the
effective yield on your Notes below their stated interest rate.

Lending Club will be the initial paying agent for the Notes.
Lending Club will make all required payments on each Note to the
Lending Club account of the holder in whose name the Note is
registered on the record date for the relevant payment date. The
record date for each payment date shall be the second business
day prior to the actual payment date. If a payment date falls on
a date that is not a business day, then such payment will be
made on the next succeeding business day.

Business day means each Monday, Tuesday,
Wednesday, Thursday and Friday that is (1) not a day on
which the Automated Clearing House system operated by the
U.S. Federal Reserve Bank (the ACH System) is
closed and (2) not a day on which banking institutions in
San Francisco, California or New York, New York are
authorized or obligated to close.

Limitations
on Payments

Each holder of a Notes right to receive principal and
interest payments and other amounts in respect of that Note is
limited in all cases to the holders pro rata portion of
the Member Loan Net Payments, if any.

For each series of Notes, Member Loan Net
Payments means the amounts, if any, equal to the
Member Loan Payments from the corresponding member loan minus
the applicable Service Charge.

Member Loan Payments for each series of
Notes means all amounts received by the Company in connection
with the corresponding member loan, including without
limitation, all payments or prepayments of principal and
interest, any late fees and any amounts received by the Company
upon collection efforts with respect to the corresponding member
loan, but excluding the Unsuccessful Payment Fee, any collection
fees imposed by Lending Club or Lending Clubs third-party
collection agency and any payments due to Lending Club on
account of portions of the corresponding member loan, if any,
funded by Lending Club in its capacity as a lender on the
platform.

The Service Charge is an amount equal to 1%
of all Member Loan Payments.

The Unsuccessful Payment Fee is a $15.00 fee
or such lesser amount permitted by law charged by the Company
when the Companys payment request is denied for any
reason, including but not limited to, insufficient funds in the
borrower members bank account or the closing of that bank
account.

To the extent that anticipated Member Loan Payments from a
member loan are not received by Lending Club, no payments will
be due and payable by Lending Club on the Notes related to that
member loan, and a holder of a Note will not have any rights
against Lending Club or the borrower member in respect of the
Note or the member loan corresponding to such holders Note.

Prepayments

To the extent that a borrower member prepays a corresponding
member loan, such prepayment amount will be a Member Loan
Payment and holders of Notes related to that corresponding
member loan will be entitled to receive their pro rata shares of
the prepayment net of the applicable service charge. In the case
of a partial prepayment of a corresponding member loan, Lending
Club will automatically recalculate the anticipated amortization
schedules for the Notes over the remainder of their term and
will make available to the holders of those Notes a revised
estimate of monthly payments to be received over such term.

Mandatory
Redemption

Upon the occurrence of a confirmed identity fraud incident with
respect to a member loan, Lending Club will redeem all of the
Notes of the series corresponding to such member loan for 100%
of the outstanding principal amount of such Notes. An
identity fraud incident means that the corresponding
member loan has been obtained as a result of identity theft or
fraud on the part of the purported borrower member. We may, in
our discretion, require proof of the identity theft or fraud,
such as a copy of the police report filed by the person whose
identity was wrongfully used to obtain the corresponding member
loan.

Servicing
Covenant

Lending Club is obligated to use commercially reasonable efforts
to service and collect the member loans, in good faith,
accurately and in accordance with industry standards customary
for servicing loans such as the member loans. If Lending Club
refers a delinquent member loan to a collection agency on the
31st day of its delinquency, that referral shall be deemed
to constitute commercially reasonable servicing and collection
efforts. Furthermore, Lending Club may, at any time and from
time to time, amend or waive any term of a member loan, and may
transfer, sell or cancel any member loan that is more than
120 days delinquent without the consent of any holder of
any Notes of the series corresponding to such member loan. As of
June 30, 2008, we have never modified or waived any term or
condition of any member loan and have never transferred, sold or
cancelled any member loan. In the event that Lending Club
undertakes such a modification, waiver, transfer, sale or
cancellation, Lending Club will notify the relevant lender
member by email, and the impact of such action will be reflected
in the lender members account. See About the Loan
Platform  How the Lending Club Platform
Operates  Post-Closing Loan Servicing and
Collection for a description of Lending Clubs
imposition of late fees. Lending Club will also be obligated to
use commercially reasonable efforts to maintain backup servicing
arrangements providing for the servicing of the member loans.

The indenture contains no financial covenants or other covenants
limiting Lending Clubs operations or activities, including
the incurrence of indebtedness.

Consolidation,
Merger, Sale of Assets

The indenture prohibits Lending Club from consolidating with or
merging into another business entity or conveying, transferring
or leasing our properties and assets substantially as an
entirety to any business entity, unless:



the surviving or acquiring entity is a U.S. corporation,
limited liability company, partnership or trust and it expressly
assumes our obligations with respect to the outstanding Notes by
executing a supplemental indenture;



immediately after giving effect to the transaction, no default
shall have occurred or be continuing; and



we have delivered to the trustee an officers certificate
and an opinion of counsel, each stating that the transaction,
and if a supplemental indenture is required in connection with
such transaction, such

supplemental indenture, comply with the indenture and all
conditions precedent relating to such transaction have been
complied with.

Denominations,
Form and Registration

Except as may be provided otherwise for a particular series of
Notes, we will issue Notes in denominations of $25 or integral
multiples of $25. The Notes will be issued only in registered
form and only in electronic form. This means that each Note will
be stored on our website. You can view your Notes online and
print copies for your records, by visiting your secure,
password-protected webpage in the My Account section
of our website. We will not issue certificates for the Notes.
Lender members will be required to hold their Notes through
Lending Clubs electronic Note register.

The laws of some states in the United States require that
certain persons take physical delivery in definitive,
certificated form, of securities that they own. This may limit
or curtail the ability of such persons to purchase Notes.

We reserve the right to issue certificated Notes only if we
determine not to have the Notes held solely in electronic form.

We and the trustee will treat the lender members in whose names
the Notes are registered as the owners thereof for the purpose
of receiving payments and for any and all other purposes
whatsoever with respect to the Notes.

Restrictions
on Transfer

The Notes will not be listed on any securities exchange. All
Notes must be held by Lending Club lender members. The Notes
will not be transferable except through
the
trading system. There can be no assurance, however, that a
market for Notes will develop on the trading system, or that the
system will continue to operate. Therefore, lender members must
be prepared to hold their Notes to maturity. See About the
Loan Platform  Trading System.

No
Sinking Fund

The Notes will not have the benefit of a sinking fund.

Events
of Default

Under the terms of the indenture, any of the following events
will constitute an event of default for a series of Notes:



failure by Lending Club to make required payments on the Notes
for thirty days past the applicable due date;



failure by Lending Club to perform, or the breach of, any other
covenant for the benefit of the holders of the Notes of such
series which continues for 90 days after written notice
from the Trustee or holders of 25% of the outstanding principal
amount of the debt securities of all series for which such
default exists as provided in the indenture, subject to an
additional 90 day cure period; or

It is not a default or event of default under the terms of the
indenture if we do not make payments when a borrower member does
not make payments to us on the member loan corresponding with
the particular series of Notes. In that case, Lending Club is
not required to make payments on Notes, so no default occurs.
See Risk Factors Payments on the Notes depend
entirely on payments we receive in respect of corresponding
member loans. An event of default with respect to one
series of Notes is not automatically an event of default for any
other series.

If an event of default occurs due to bankruptcy, insolvency or
reorganization as provided in the indenture then the stated
principal amount of the Notes shall become due and payable
immediately without any act by the trustee or any holder of
Notes.

The holders of a majority in aggregate principal amount of the
outstanding Notes of any series, by notice to the trustee (and
without notice to any other holder of Notes), may on behalf of
the holders of all such notes waive an existing default with
respect to such Notes and its consequences except (1) a
default in the payment of amounts due in respect of such Notes
or (2) a default in respect of a provision of the indenture
that cannot be amended without the consent of each holder
affected by such waiver. When a default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or
other default or impair any consequent right.

A holder of any Note of any series may not institute a suit
against us for enforcement of such holders rights under
the indenture or pursue any other remedy with respect to the
indenture or the Notes unless:



the holder gives to the trustee written notice stating that an
event of default with respect to the Notes is continuing;



the holders of at least 25% in aggregate principal amount of the
outstanding Notes of that series make a written request to the
trustee to pursue the remedy;



such holder or holders offer to the trustee security or
indemnity satisfactory to it against any loss, liability or
expense satisfactory to the trustee;



the trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of
security or indemnity; and



the holders of a majority in aggregate principal amount of the
outstanding Notes of that series do not give the trustee a
direction inconsistent with such request during such
60-day
period.

The indenture will require us every year to deliver to the
trustee a statement as to performance of our obligations under
the indenture and as to any defaults.

A default in the payment of any of the Notes or a default with
respect to the Notes that causes them to be accelerated, may
give rise to a cross-default under our other indebtedness.

Satisfaction
and Discharge of the Indenture

The indenture will generally cease to be of any further effect
with respect to a series of Notes if:



all of the Notes of that series (with certain limited
exceptions) have been delivered for cancellation; or



all Notes of that series not previously delivered for
cancellation have become due and payable or will become due and
payable within one year and we have deposited with the trustee
as trust funds the entire amount sufficient to pay at maturity
all of the amounts due with respect to those Notes;

if in either case, we also pay or cause to be paid all other
sums payable under the indenture by us and deliver to the
trustee an officers certificate and opinion of counsel
stating that all conditions precedent to the satisfaction and
discharge of the indenture have been complied with.

The indenture does not contain any provisions for legal or
covenant defeasance of the Notes.

Governing
Law

The indenture and the Notes will be governed by the laws of the
State of New York without regard to any principle of conflict
of laws that would require or permit the application of the laws
of any other jurisdiction.

Information
Concerning the Trustee

Wells Fargo Bank, National Association is the trustee under the
indenture. From time to time, we maintain deposit accounts
including and conduct other banking transactions with the
trustee and its affiliates in the ordinary course of business.
If and when the trustee becomes a creditor of ours, the trustee
will be subject to the provisions of the Trust Indenture
Act regarding the collection of claims against us. The trustee
and its affiliates will be permitted to engage in other
transactions; however, if they acquire any conflicting interest,
the conflict must be eliminated or the trustee must resign.

When a lender member registers on the platform, the lender
member enters into a note purchase agreement with us that
governs the lender members purchases of Notes from time to
time from us. Under the agreement, we provide the lender member
the opportunity through the platform to review loan requests,
purchase Notes, and instruct us to apply the proceeds from the
sale of each Note to the funding of a specific member loan the
lender member has designated.

Under the agreement, the lender member must commit to purchase a
Note to fund a member loan prior to the origination of that
loan. At the time the lender member commits to purchase a Note
the lender member must have sufficient funds in the lender
members account with us to complete the purchase, and the
lender member will not have access to those funds after making
the purchase commitment unless and until we notify the lender
member that the member loan will not be funded. Once the lender
member makes a purchase commitment, it is irrevocable regardless
of whether the full amount of the borrower members loan
request is funded. If the member loan does not close, then we
will inform the lender member and release him or her from the
purchase commitment.

The agreement describes our limited obligation to redeem Notes
in the case of identity fraud, which is described above. The
lender member agrees that in such circumstances the lender
member will have no rights with respect to any such Notes except
the crediting of the purchase price to the lender members
account.

The lender member agrees that the lender member has no right to
make any attempt, directly or through any third party, to take
any action to collect from the borrower members on the lender
members Notes or the corresponding member loans.

The lender member acknowledges that the Notes are intended to be
indebtedness of LendingClub for U.S. federal income tax
purposes and agrees not to take any position inconsistent with
that treatment of the Notes for tax, accounting, or other
purposes, unless required by law. The lender member also
acknowledges that the Notes will be subject to the original
issue discount rules of the Internal Revenue Code of 1986, as
amended, as described below under Certain
U.S. Federal Income Tax Considerations  Taxation
of Payments on the Notes. The lender member acknowledges
that the Notes are not transferable at this time and that the
lender member intends to hold the Notes until maturity and has
no intention to distribute the Notes.

The agreement describes the limitations on payments on the
Notes, which are described above. We expressly disclaim any
representations as to a borrower members ability to pay
the corresponding member loan and do not act as a guarantor of
any corresponding member loan payments by any borrower member.

The parties make customary representations and warranties to
each other, and the lender member represents and warrants that
the lender member has not made a decision in connection with any
loan requests on the Lending Club platform on any prohibited
basis set forth in the Equal Credit Opportunity Act and
Regulation B or any applicable state or local laws,
regulations, rules or ordinances concerning credit
discrimination.

The lender member acknowledges and agrees that we assume no
advisory or fiduciary responsibility in the lender members
favor in connection with the purchase and sale of the Notes and
we have not provided the lender member with any legal,
accounting, regulatory or tax advice with respect to the Notes.

The agreement provides that neither party is liable to the other
party for any lost profits, or special, exemplary, consequential
or punitive damages.

The agreement provides that it is subject to binding
arbitration. It also provides that the parties waive a jury
trial in any litigation related to the agreement and any member
loans or other agreements related to the note purchase
agreement. The agreement will be governed by the laws of the
State of New York without regard to any principle of conflict of
laws that would require or permit the application of the laws of
any other jurisdiction.

Material
U.S. Federal Income Tax Considerations

The following discussion sets forth the material
U.S. federal income tax considerations generally applicable
to our lender members who purchase Notes. This discussion is
based on the U.S. Internal Revenue Code of 1986, as amended
(the Code), Treasury regulations promulgated
thereunder (Treasury Regulations), administrative

pronouncements of the U.S. Internal Revenue Service
(IRS) and judicial decisions, all as currently in
effect and all of which are subject to change and to different
interpretations. Changes to any of the foregoing authorities
could apply on a retroactive basis, and could affect the
U.S. federal income tax consequences described below.

This discussion does not address all of the U.S. federal
income tax considerations that may be relevant to a particular
lender members circumstances, and does not discuss any
aspect of U.S. federal tax law other than income taxation
or any state, local or
non-U.S. tax
consequences of the purchase, ownership and disposition of the
Notes. This applies only to lender members who hold the Notes as
capital assets within the meaning of the Code (generally,
property held for investment). This discussion does not address
U.S. federal income tax considerations applicable to lender
members that may be subject to special tax rules, such as:

persons holding Notes as part of a straddle,
hedge, synthetic security or
conversion transaction for U.S. federal income
tax purposes, or as part of some other integrated investment;



partnerships or other pass-through entities;



persons subject to the alternative minimum tax;



certain former citizens or residents of the United States;



non-U.S. holders; or



U.S. Holders (as defined below) whose
functional currency is not the U.S. dollar.

As used herein, a U.S. Holder is a beneficial
owner of Notes that is, for U.S. federal income tax
purposes, (i) an individual citizen or resident of the
United States, (ii) a corporation (or any other entity
treated as a corporation for U.S. federal income tax
purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia,
(iii) an estate whose income is subject to
U.S. federal income tax regardless of its source, or
(iv) a trust if (A) a United States court has the
authority to exercise primary supervision over the
administration of the trust and one or more U.S. persons
(as defined under the Code) are authorized to control all
substantial decisions of the trust or (B) it has a valid
election in place to be treated as a U.S. person. A
Non-U.S. Holder
is any beneficial owner of a Note that, for U.S. federal
income tax purposes, is not a U.S. Holder and that is not a
partnership (or other entity treated as a partnership for
U.S. federal income tax purposes).

If a partnership (or other entity treated as a partnership for
U.S. federal income tax purposes) holds Notes, the
U.S. federal income tax treatment of a partner will
generally depend on the status of the partner and the activities
of the partnership. A partnership holding Notes, and partners in
such a partnership, should consult their own tax advisors with
regard to the U.S. federal income tax consequences of the
purchase, ownership and disposition of the Notes by the
partnership.

THIS DISCUSSION OF THE MATERIAL U.S. FEDERAL INCOME TAX
CONSIDERATIONS OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
NOTES IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO
BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR PERSON. ACCORDINGLY,
ALL PROSPECTIVE LENDER MEMBERS ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS WITH RESPECT TO THE U.S. FEDERAL, STATE, LOCAL
AND
NON-U.S. TAX
CONSEQUENCES RELATING TO THE PURCHASE, OWNERSHIP AND DISPOSITION
OF THE NOTES BASED ON THEIR PARTICULAR CIRCUMSTANCES.

No authority directly addresses the treatment of the Notes or
instruments similar to the Notes for U.S. federal income
tax purposes. In general, a taxpayer is bound by the form of a
transaction for U.S. federal income tax purposes. In form,
the Notes will be obligations of Lending Club. Accordingly,
although the matter is not free from doubt, Lending Club intends
to treat the Notes as indebtedness of Lending Club for
U.S. federal income tax purposes.

The IRS may take contrary positions and, accordingly, no
assurance can be given that the IRS or a court will agree with
the tax characterizations and tax consequences described below.
Where the form of a transaction does not reflect the economic
realities of the transaction, the substance rather than the form
should determine the tax consequences. Each series of Notes will
correspond to a member loan, and Lending Club has no obligation
to make any payments on the Notes unless, and then only to the
extent that, Lending Club has received payments on the
corresponding member loan. Accordingly, the IRS could determine
that, in substance, each lender member owns a proportionate
interest in the corresponding member loan for U.S. federal
income tax purposes. The IRS could also determine that the Notes
are not indebtedness of Lending Club but another financial
instrument.

The following discussion is based upon the assumption that each
Note will be treated as a debt instrument of Lending Club for
U.S. federal income tax purposes. Any differing treatment
of the Notes could significantly affect the amount, timing and
character of income, gain or loss in respect of an investment in
the Notes. Accordingly, all prospective purchasers of the Notes
are advised to consult their own tax advisors regarding the
U.S. federal, state, local and
non-U.S. tax
consequences of the purchase, ownership and disposition of the
Notes (including any possible differing treatments of the Notes).

Taxation
of Payments on the Notes

The Notes will have original issue discount, or OID, for
U.S. federal income tax purposes. A U.S. Holder of a
Note will be required to include such OID in income as ordinary
interest income for U.S. federal income tax purposes as it
accrues under a constant yield method, regardless of such
U.S. Holders regular method of tax accounting. If a
Note is paid in accordance with its payment schedule, which is
available on the holders account page at
www.lendingclub.com, the amount of OID includible in income by a
U.S. Holder is anticipated to be based on the yield of the
Note determined net of the 1% service charge, as described
below, which yield will be lower than the stated interest rate
on the Note. As a result, the holder will generally be required
to include an amount of OID in income that is less than the
amount of stated interest paid on the Note. On the other hand,
if a payment on a Note is not made in accordance with such
payment schedule, for example because the borrower member did
not make timely payment in respect of the corresponding member
loan, a U.S. Holder will be required to accrue and include
such amount of OID in taxable income as interest even though
such interest has not been paid.

The Treasury Regulations governing OID provide special rules for
determining the amount and accrual of OID for debt instruments
that provide for one or more alternative payment schedules
applicable upon the occurrence of contingencies. If the timing
and amounts of the payments that comprise each payment schedule
are known as of the issue date, and based on all the facts and
circumstances as of the issue date, a single payment schedule
for a debt instrument, including the stated payment schedule, is
significantly more likely than not to occur, the amount and
accrual of OID is determined based on that payment schedule. In
addition, under the applicable Treasury Regulations, remote
and/or
incidental contingencies generally may be ignored. A contingency
relating to the amount of a payment is incidental if, under all
reasonably expected market conditions, the potential amount of
the payment is insignificant relative to the total expected
amount of the remaining payments on the debt instrument. A
contingency relating to the timing of a payment is incidental
if, under all reasonably expected market conditions, the
potential difference in the timing of the payment is
insignificant.

The Notes provide for one or more alternative payment schedules
because Lending Club is obligated to make payments on a Note
only to the extent that Lending Club receives payments on the
corresponding member loan. The payment schedule for each Note,
which is available on the holders account page at
www.lendingclub.com, provides for payments of principal and
interest (net of the 1% service charge) on the Note in
accordance with the payment schedule for the corresponding
member loan. In addition to scheduled payments, Lending Club
will prepay a Note to the extent that a borrower member prepays
the member loan corresponding to the Note, and late fees
collected on

the member loan corresponding to a Note will be paid to the
holders of the Note. Notwithstanding such contingencies, Lending
Club has determined to use the payment schedule of a Note to
determine the amount and accrual of OID on the Note because
Lending Club believes that a Note is significantly more likely
than not to be paid in accordance with such payment schedule
and/or the
likelihood of nonpayment, prepayment, or late payment by the
borrower member on the member loan corresponding to such Note
will be remote or incidental. If in the future Lending Club
determines that the previous sentence does not apply to a Note,
Lending Club anticipates that it will be required to determine
the amount and accrual of OID for such Note pursuant to the
rules applicable to contingent payment debt instruments, which
are described below, and shall so notify U.S. Holders of
the Note.

Lending Clubs determination is not binding on the IRS. If
the IRS determines that the Notes are contingent payment
debt instruments due to the contingencies described above
(or in the future, if Lending Club so concludes with respect to
a particular series of Notes), the Notes will be subject to
special rules applicable to contingent payment debt instruments.
Such rules generally require a holder (i) to accrue
interest income based on a projected payment schedule and
comparable yield, which may be higher or lower than the stated
interest rate on the Notes, and (ii) treat as ordinary
income, rather than capital gain, any gain recognized on the
sale, exchange, or retirement of the debt instrument. This
discussion assumes that the Notes are not subject to the
contingent payment debt instrument rules.

The OID on a Note will equal the excess of the Notes
stated redemption price at maturity over its
issue price. The stated redemption price at maturity
of a Note should include all payments of principal and stated
interest on the Note (net of the 1% service charge) under the
payment schedule of the Note. The issue price of the Notes will
equal the principal amount of the Notes.

The amount of OID includible in a U.S. Holders income
for a taxable year is the sum of the daily portions
of OID with respect to the Note for each day during the taxable
year in which the holder held the Note. The daily portion of OID
is determined by allocating to each day of any accrual period
within a taxable year a pro rata portion of an amount equal to
the product of such Notes adjusted issue price at the
beginning of the accrual period and its yield to maturity
(properly adjusted for the length of the period). Lending Club
intends to use
30-day
accrual periods. The adjusted issue price of a Note at the
beginning of any accrual period should be its issue price,
increased by the aggregate amount of OID previously accrued with
respect to the Note, and decreased by any payments of principal
and interest previously made on the Note (net of the 1% service
charge). A Notes yield to maturity should be the discount
rate that, when used to compute the present value of all
payments of principal and interest to be made on the Note (net
of the 1% service charge) under the payment schedule of the
Note, produces an amount equal to the issue price of such note.

Cash payments of interest and principal (net of the 1% service
charge) under the payment schedule on the Notes will not be
separately included in income, but rather will be treated first
as payments of previously accrued but unpaid OID and then as
payments of principal.

Sale,
Retirement or Other Taxable Disposition of Notes

Upon the sale, retirement or other taxable disposition of a
Note, a U.S. Holder generally will recognize gain or loss
equal to the difference, if any, between the amount realized
upon the sale, retirement or other taxable disposition and the
U.S. Holders adjusted tax basis in the Note. In
general, the U.S. Holders adjusted tax basis of the
Note will equal the U.S. Holders cost for the Note,
increased by the OID and market discount previously included in
gross income by the holder, as discussed below, and reduced by
any payments previously received by the holder in respect of the
Note.

Except as described below with respect to Notes acquired at a
market discount or, as discussed above, treated as a contingent
payment debt instrument, such gain or loss generally will be
capital gain or loss and will be long-term capital gain or loss
if at the time of sale, retirement or other taxable disposition
the Note has been held for more than one year. Under current
U.S. federal income tax law (presently effective for
taxable years beginning before January 1, 2011), certain
non-corporate U.S. Holders, including individuals, are
eligible for preferential rates of U.S. federal income
taxation in respect of long-term capital gains. The
deductibility of capital losses is subject to limitations under
the Code.

As discussed above, Lending Club will prepay a Note to the
extent that a borrower member prepays the member loan
corresponding to the Note. If Lending Club prepays a note in
full, the Note will be treated as retired, and, as described
above, a U.S. Holder generally will have gain or loss equal
to the difference, if any, between the amount realized upon the
retirement and the U.S. Holders adjusted tax basis in
the Note. If Lending Club prepays a Note in part, a portion of
the Note will be treated as retired. Generally, for purposes of
determining (i) the gain or loss attributable to the
portion of the Note retired and (ii) the OID accruals on
the portion of the Note remaining outstanding, the adjusted
issue price, holders adjusted tax basis, and the accrued
but unpaid OID of the Note, determined immediately before the
prepayment, will be allocated between the two portions of the
Note based on the portion of the Note that is treated as
retired. The yield to maturity of a Note is not affected by a
partial prepayment.

Market
Discount

If a U.S. Holder purchases a Note on the trading system for
an amount that is less than the adjusted issue price of the Note
at the time of purchase, the amount of the difference will be
treated as market discount for U.S. federal
income tax purposes, unless that difference is less than a
specified de minimis amount. Under the market discount
rules, a U.S. Holder generally will be required to treat
any principal payments received in respect of the Note, and any
gain derived from the sale, retirement or other disposition of
the Note, as ordinary income to the extent of the market
discount that has accrued on the Note (on a ratable basis over
the remaining term of the Note or, at the election of the
U.S. Holder, a constant yield basis) but has not previously
been included in gross income by the U.S. Holder. In
addition, a U.S. Holder may be required to defer until the
maturity of the Note, or its earlier disposition in a taxable
transaction, the deduction of all or a portion of any interest
expense incurred on indebtedness incurred or continued to
purchase or carry such Note.

A U.S. Holder may elect to currently include market
discount in gross income as it accrues, under either a ratable
or constant yield method, in which case the rules described in
the prior paragraph regarding characterization of payments and
gain as ordinary income and the deferral of interest deductions
will not apply. An election to currently include market discount
in gross income, once made, applies to all market discount
obligations acquired by the U.S. Holder on or after the
first taxable year to which the election applies and may not be
revoked without the consent of the IRS. Lender members should
consult their own tax advisors before making this election.

Acquisition
Premium

If a U.S. Holder purchases a Note on the trading system for
an amount greater than the Notes adjusted issue price but
less than the sum of all amounts payable on the Note after the
purchase date, the Note will be treated as acquired at an
acquisition premium. For a Note acquired with an acquisition
premium, the amount of OID that the U.S. Holder must
include in gross income with respect to the Note for any taxable
year will be reduced by the portion of the acquisition premium
properly allocable to such taxable year.

If a U.S. Holder purchases a Note on the trading system for
an amount in excess of the sum of all amounts payable on the
Note after the purchase date, the U.S. holder will not be
required to include OID in income with respect to the Note.

Late
Payments

As discussed above, late fees collected on the member loan
corresponding to the Notes will be paid to the holders of the
Notes. Lending Club anticipates that any late fees paid will be
insignificant relative to the total expected amount of the
remaining payments on the Note. In such case, any late fees paid
to a U.S. Holder of Notes should be taxable as ordinary
income at the time such fees are paid or accrued in accordance
with the U.S. Holders regular method of accounting
for U.S. federal income tax purposes.

Nonpayment
of Member Loans Corresponding to Note

In the event that Lending Club does not make scheduled payments
on a Note as a result of nonpayment by a borrower member on the
member loan corresponding to the Note, a U.S. Holder must
continue to accrue and include

OID on a Note in taxable income. Solely for purposes of the OID
rules, the Note may be treated as retired and reissued on the
scheduled payment date for an amount equal to the Notes
adjusted issue price on that date. As a result of such
reissuance, the amount and accrual of OID on the Note may
change. At the time of the deemed reissuance, due to nonpayment
by the borrower member, Lending Club may not be able to conclude
that it is significantly more likely than not that the Note will
be paid in accordance with one payment schedule
and/or that
the likelihood of future nonpayment, prepayment, or late payment
by the borrower member on the member loan corresponding to such
Note will be remote or incidental. Accordingly, the Note may
become subject to the contingent payment debt instrument rules.
As discussed above, contingent payment debt instruments are
subject to special rules. If Lending Club determines that a Note
is subject to the contingent payment debt instrument rules as a
result of such a reissuance, it will notify the
U.S. holders and provide the projected payment schedule and
comparable yield.

If collection on a Note becomes doubtful, a U.S. Holder may
be able to stop accruing OID on the Note. Under current IRS
guidance, it is not clear whether a U.S. Holder may stop
accruing OID if scheduled payments on a Note are not made.
U.S. Holders should consult their own tax advisors
regarding the accrual and inclusion of OID in income when
collection on a Note becomes doubtful.

Losses
as a result of Worthlessness

In the event that a Note becomes worthless, a non-corporate
U.S. Holder that did not acquire the Note as part of the
holders trade or business generally should be entitled to
deduct the holders adjusted tax basis in the Note as a
short-term capital loss in the taxable year the Note becomes
worthless. The portion of the U.S. Holders adjusted
tax basis attributable to accrued but unpaid OID may be
deductible as an ordinary loss, although such treatment is not
entirely free from doubt. Under Section 166 of the Code,
corporate U.S. Holders and other U.S. Holders that
acquired Notes as part of a trade or business generally are
entitled to deduct as an ordinary loss any loss sustained during
the taxable year on account of a Note becoming wholly or
partially worthless. U.S. Holders should consult their own
tax advisors regarding the character and timing of losses
attributable to Notes that become worthless in whole or in part.

Backup
Withholding and Information Reporting

In general, Lending Club will be required to provide information
returns to non-corporate U.S. Holders, and corresponding
returns to the IRS, with respect to (i) payments, and
accruals of OID, on the Notes and (ii) payments with
respect to proceeds from a sale, retirement or other taxable
disposition of a Note. In addition, a non-corporate
U.S. Holder may be subject to backup withholding (currently
at a 28% rate) on such payments if the U.S. Holder
(i) fails to provide an accurate taxpayer identification
number to the payor; (ii) has been notified by the IRS of a
failure to report all interest or dividends required to be shown
on its U.S. federal income tax returns; or (iii) in
certain circumstances, fails to comply with applicable
certification requirements or otherwise establish an exemption
from backup withholding.

Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against a
U.S. Holders U.S. federal income tax liability
provided the required information is furnished to the IRS on a
timely basis. U.S. Holders should consult their tax
advisors regarding the application of information reporting and
backup withholding rules in their particular situations, the
availability of an exemption therefrom, and the procedure for
obtaining such an exemption, if applicable.

You should read the following discussion in conjunction with
our financial statements and the related notes elsewhere in this
prospectus. This discussion contains forward-looking statements
that involve risks and uncertainties. Actual results and the
timing of events may differ materially from those contained in
these forward-looking statements due to a number of factors,
including but not limited to those discussed in the section
entitled Risk Factors and elsewhere in this
prospectus.

Overview

Lending Club is an Internet-based social lending platform that
enables its borrower members to borrow money and its lender
members to purchase Member Payment Dependent Notes, the proceeds
of which fund loans made to individual borrower members. We
allow qualified borrower members to obtain loans with lower
interest rates than they could through credit cards or
traditional banks. We provide lender members with the
opportunity to invest in securities that are dependent for
payment on member loans with interest rates and credit
characteristics the lender members find attractive. As a part of
operating our lending platform, we verify the identity of
members, obtain borrower members credit characteristics
from consumer reporting agencies such as TransUnion, Experian or
Equifax and screen borrower members for eligibility to
participate in the platform and facilitate the origination of
member loans through our agreement with WebBank, an
FDIC-insured, state-chartered industrial bank organized under
the laws of the state of Utah. We also provide servicing for the
member loans on an ongoing basis.

All member loans are unsecured obligations of individual
borrower members with fixed interest rates and three-year
maturities. The member loans are originated through our website,
funded by WebBank at closing and immediately assigned to Lending
Club upon closing.

Following the date of this prospectus, our lender members will
have the opportunity to buy Notes issued by Lending Club, with
each series of Notes corresponding to a single individual
borrower member loan originated through our platform.

Lending Club was incorporated in Delaware in October 2006, and
began operations as an application on Facebook.com in May 2007.
Since inception, we have continually refined our business model
and operations in response to market demands. In August 2007, we
conducted a venture capital financing round and expanded our
operations with the launch of our public website,
www.lendingclub.com. As of March 31, 2008, the lending
platform has facilitated approximately 1,616 member loans
since its launch in May 2007.

We have been operating since December 2007 pursuant to an
agreement with WebBank. WebBank serves as the lender for all
member loans originated through our platform. Our agreement with
WebBank has enabled us to make our platform available to
borrowers on a uniform basis nationwide, except that we do not
currently offer member loans in Idaho, Indiana, Iowa, Maine,
North Carolina and North Dakota. We pay WebBank a monthly
service fee based on the amount of loan proceeds disbursed by
WebBank in each month, subject to a minimum monthly fee.

Due to our continuing losses from operations, our auditors have
qualified their audit report for the year ended March 31,
2008 by including an explanatory paragraph assuming our ability
to continue as a going concern.

We have a limited operating history and have incurred net losses
since our inception. Our net loss for the year ended
March 31, 2008 was approximately $7.0 million. We earn
revenues from processing fees charged to members, primarily a
borrower origination fee and a lender member service charge. We
also earn interest on member loans that we fund and hold for
investment. At this stage of our development, we have funded our
operations primarily with proceeds from our venture capital
financings and our credit facilities, which are described below
under Liquidity and Capital Resources. We also rely
on our credit facilities to borrow funds, which we have used to
participate in the lending platform as a lender. Over time, we
expect that the number of borrower members and lender members
and the volume of member loans originated through our platform
will increase, and once we are able to accept new lending
commitments on our platform, we will generate increased revenue
from borrower

origination fees and lender member service charges. Our
decision to temporarily stop accepting lender member commitments
effective from April 7, 2008 until the date of this
prospectus, slowed the ramp up of our operations, resulting in a
negative impact on our cash flow and liquidity projections for
fiscal 2009 due to a projected decrease in loan origination
volume following April 7, 2008.

Our operating plan calls for a continuation of the current
strategy of raising debt and equity financing to finance our
operations until we reach profitability and become cash-flow
positive, which we do not expect to occur before 2010. Our
initial operating plan called for significant investments in
website development, security, loan scoring, loan processing and
marketing, and for two to three rounds of equity financing
before we reached profitability. We completed the first of these
two to three planned rounds of equity financing in August 2007
in an amount of $10 million. Going forward, we expect to
complete an additional round of equity financing in 2009. We
expect to continue raising smaller rounds of debt and
convertible debt financing in the meantime.

As described below under Business  Prior
Operation of the Lending Club Platform, we have made
significant changes to the operation of our lending platform
that will become effective as of the date of this prospectus.
Our historical financial results and this discussion reflect the
structure of our lending platform and our operations prior to
the date of this prospectus. For a discussion of the expected
impact of our new structure on our financial statements, see
Impact of New Lending Platform Structure below.

Critical
Accounting Policies and Estimates

This discussion and analysis of our financial condition and
results of operations are based on our financial statements,
which we have prepared in accordance with generally accepted
accounting principles. The preparation of these financial
statements requires us to make estimates and assumptions that
affect the reported amount of assets and liabilities, revenues
and expenses and related disclosures. Management bases its
estimates on historical experience and on various other factors
it believes to be reasonable under the circumstances, the
results of which form the basis for making judgments about the
carrying values of assets and liabilities. Actual results may
differ from these estimates. Our significant accounting policies
are more fully described in Note 1 to our consolidated
financial statements included elsewhere in this prospectus.

Revenue
Recognition

Revenues primarily result from interest earned on loans held for
investment and transaction fees, which are borrower origination
fees (borrower member paid) and lender member service charges
(lender member paid).

Interest income is accrued and recorded in our statement of
operations as earned. Loans are placed on non-accrual status
when any portion of scheduled principal or interest payments is
90 days past due, or earlier, when concern exists as to the
ultimate collectability of outstanding principal or interest.
When a loan is placed on non-accrual status, the accrued and
unpaid interest is reversed and interest income is recorded when
the principal balance has been reduced to an amount that is
deemed collectible. Loans return to accrual status when
principal and interest become current and are anticipated to be
fully collectible on a timely basis.

Revenues related to borrower origination fees are recognized in
accordance with Statement of Financial Accounting Standards
No. 91, Accounting for Non-refundable Fees and
Costs (SFAS 91). The borrower origination
fee charged to borrower members is determined by the credit
grade of their unsecured loan. The borrower origination fee is
included in the Annual Percentage Rate (APR)
calculation provided to the borrower member and is deducted from
the gross loan proceeds prior to disbursement of the loan funds
to the borrower member. A loan is considered funded when the
Automated Clearing House (ACH) transaction has been
successfully initiated to the borrower members bank
account.

Borrower origination fees are accounted for in one of two
methods, depending upon whether the loans were sold to lender
members and are therefore not recorded on the accompanying
balance sheets (transferred loans) or, for those
loans which Lending Club is the direct lender and as such, those
loans are recorded on the accompanying

balance sheet (loans held for investment). These two
types of borrower origination fee transactions are accounted for
as follows:



Borrower origination fees for transferred loans 
Because the earnings process is deemed to be complete at the
time these loans are transferred to the lender members, and
there is no recourse to Lending Club in the event of default by
the borrower, Lending Club recognizes one hundred percent of
this type of loan origination fee as revenue at the time the
loan is transferred to the lender member.



Borrower origination fees for loans held for
investment  Borrower origination fees from loans
originated with Lending Club funds are initially deferred and
subsequently amortized ratably over the term of the loan as an
adjustment to the yield of the loan, and are reported in our
statements of operations as interest income. As of
March 31, 2008, the Company had unamortized deferred
borrower origination fees of $55,244. These deferred borrower
origination fees will be amortized monthly as interest income
through April 2011.

Lender service charge revenue is recognized in accordance with
Statement of Financial Accounting Standards No. 156,
Accounting for Servicing of Financial Assets, an amendment
of FASB Statement No. 140
(SFAS 156), and is calculated and recognized
when a borrower member payment is successfully transacted via an
ACH debit out of the borrower members bank account.
Currently, a 1% service charge is charged on each payment and is
deducted from the proceeds remitted to the lender member at the
time that the payment is received from the borrower member,
until such time the member loan is either paid in full or
becomes delinquent and goes on non-accrual status.

Loans
Held for Investment

Since November 2007, we have participated in the lending
platform as a lender. As a lender, we receive payments of
interest and principal on the loans we have funded. We have
funded loans totaling approximately $7.0 million through
March 31, 2008. Of the loans we have funded, we have
principal balances outstanding of approximately
$6.7 million as of March 31, 2008. These loans have a
36-month
repayment schedule and earn interest ranging from 7.2% to 18.61%
per annum. We purchased these loans with proceeds from our debt
facilities and note issuances discussed below under
Liquidity and Capital Resources. These loans are
classified as held for investment based on our intent and
ability to hold the loans for the foreseeable future or to
maturity. Loans held for investment are carried at amortized
cost reduced by a valuation allowance for estimated credit
losses incurred in the portfolio as of the date of the balance
sheet.

We also record interest income when payments are received from
borrower members on member loans that we have funded as a lender
through the platform. For the fiscal year ending March 31,
2008, interest income from our loan funding activity comprised
27.7% of our reported interest income.

Allowance
for Loan Losses

We may incur losses in connection with loans we purchase and
hold for investment if borrower members fail to pay their
monthly loan payments. We provide for incurred losses on loans
with an allowance for loan losses in accordance with Statement
of Financial Accounting Standards No. 114, Accounting
by Creditors for Impairment of a Loan
(SFAS 114), and Statement of Financial
Accounting Standards No. 5 Accounting for
Contingencies. The loan loss allowance is a valuation
allowance established to provide for estimated credit losses in
the portfolio of loans held for investment at the balance sheet
date.

The allowance for loan losses, which management evaluates on a
periodic basis, represents an estimate of potential credit
losses inherent in the portfolio and is based on a variety of
factors, including the composition and quality of the loan
portfolio, delinquency levels and trends, probable expected
losses for the next twelve months, current and historical
charge-off and loss experience, current industry charge-off and
loss experience, the condition of the market, the interest rate
climate and general economic conditions. Determining the
adequacy of our allowance for loan losses is subjective, complex
and requires judgment by management about the effect of matters
that are inherently uncertain. Moreover, in light of our limited
operating history, we do not have significant historical
experience from which to estimate expected losses in our
portfolio.

A member loan is considered impaired when, based on current
information and events, it is probable that we will be unable to
collect the scheduled payments of principal or interest when due
according to the contractual terms of the original loan
agreement with the borrower member. Our loan portfolio is
comprised primarily of small groups of homogeneous, unsecured
loans made to borrower members. We evaluate both individual
loans and our portfolio of loans held for investment for
impairment. These loans are generally placed on non-accrual
status when they become 90 days delinquent. Our estimate of
the required allowance for loan losses is developed by
estimating both the rate of default of the loans and the amount
of loss in the event of default. The rate of default is assigned
to the loans based on their attributes (including borrower
member FICO score, and credit grade) and collection status. The
rate of default is based on analysis of actual and expected
migration of loans from each aging category to default over a
twelve-month period. Loans more than 90 days past due are
assigned a rate of default that measures the percentage of such
loans that default over their lives as it is assumed that the
condition causing the ultimate default currently exists. The
default rate of the loan is then multiplied by an average loss
rate for the type of loan.

Additionally, we review specific loans that become delinquent
within the portfolio based on the dollar amount of the loan
outstanding and the length of time the loan has been past due.
All other loans are evaluated in the aggregate by stratifying
the loan portfolio into FICO bands based on the member
loans attributes. We make an initial assessment of whether
a charge-off is required on our delinquent loans no later than
the 120th day of delinquency. Loan losses are charged-off
against the allowance when management believes that collection
of past due amounts is not likely, and all collection efforts
have been terminated. As of March 31, 2008, there have been
no charge-offs recorded against the allowance for loan losses.

Management has created a credit risk management working group
that will review actual loan loss performance on its portfolio
of loans held for investment at least monthly. This working
group will submit recommendations to management to either
increase or decrease the allowance for loan loss reserve based
on our actual loss experience during the current period, in
addition to historical and projected loan loss experience.

For fiscal 2008, we recorded a loan loss reserve of $373,624
against our outstanding principal balance of loans held for
investment. This reserve has been netted against our loans held
for investment balance at March 31, 2008.

Stock-Based
Compensation

The Company applies Statement of Financial Accounting Standards
No. 123 (revised 2004),
Share-Based
Payment (SFAS 123R) to account for equity
awards made to employees. SFAS 123R requires all
share-based payments made to employees, including grants of
employee stock options, restricted stock and employee stock
purchase rights, to be recognized in the financial statements
based on their respective grant date fair values and does not
allow the previously permitted pro forma disclosure-only method
as an alternative to financial statement recognition.
SFAS 123R also requires the benefits of tax deductions in
excess of recognized compensation cost to be reported as a
financing cash flow, rather than as an operating cash flow as
required under previous literature.

SFAS 123R requires companies to estimate the fair value of
share-based payment awards on the date of grant using an
option-pricing model. The value of the portion of the award that
is ultimately expected to vest is recognized as expense ratably
over the requisite service periods. The Company has estimated
the fair value of each award as of the date of grant using the
Black-Scholes option pricing model. The Black-Scholes option
pricing model considers, among other factors, the expected life
of the award and the expected volatility of the Companys
stock price.

SFAS 123R also requires forfeitures to be estimated at the
time of grant and revised, if necessary, in subsequent periods
if actual forfeitures differ from initial estimates. Stock-based
compensation expense was recorded net of estimated forfeitures
for the year ended March 31, 2008, and for the period from
October 2, 2006 (inception) through March 31, 2007,
such that expense was recorded only for those stock-based awards
that are expected to vest.

Share-based awards issued to non-employees are accounted for in
accordance with provisions of SFAS 123R and EITF 96-18,
Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring or in Conjunction with Selling,
Goods and Services.

Since our common stock is not publicly traded, the expected
volatility was calculated for each date of grant based on an
alternative method. We identified similar public entities for
which share price information is available and have considered
the historical volatility of these entities share price in
estimated expected volatility.

We retrospectively estimated the fair value of our common stock
during 2007. The valuation methodology utilized the income and
the market approach with the ultimate valuation being a
probability weighted expected return of the two methods. The
income approach involves projecting future cash flows,
discounting them to present value using a discount rate based on
a risk adjusted weighted average cost of capital of comparable
companies. The projection of future cash flows and the
determination of an appropriate discount rate involves a
significant level of judgment. The market approach compares the
subject business to similar businesses that have been sold or
what is commonly known as comparables. This could be based on
prior business sales of similar companies or the relative
valuation of similar companies in the public markets discounted
back to account for the time period until a liquidity event is
forecasted to occur. The market approach also involves a
significant level of judgment. The retrospective valuation of
our common stock yielded a valuation of $0.27 during 2007.

Identity
Fraud

For the period from our inception until June 30, 2008, we
have reimbursed lender members a total of $6,000 in principal
balance due to two confirmed occurrences of identity fraud. We
expensed such cost in the period it was determined and closed
the cases. Based on the immateriality of previously expensed
identity fraud losses, the inability of the Company to
reasonably estimate losses, and the implementation of added
third party identification screening services since these cases
occurred, the Company has determined it was not necessary to
record a contingent liability in accordance with Statement of
Financial Accounting Standards No. 5,
Accounting for Contingencies.

Our business model consists primarily of charging a transaction
fee to both borrower members and lender members. The borrower
member pays a fee to us for providing the services of arranging
the member loan and the lender member pays a fee to us for
managing the payments on the loans and maintaining account
portfolios. We also charge fees to our borrower members for
unsuccessful payments. We also generate revenue from interest
earned on our loans held for investment.

Interest
Income

The following table presents our interest income sources for the
quarters in both absolute dollars (in thousands) and as a
percentage of interest income:

Our borrower members pay a one-time fee to us for arranging a
member loan. This fee is determined by the loan grade of the
member loan and, prior to June 17, 2008, ranged from 0.75%
to 2.00% of the aggregate principal amount of the member loan,
as set forth below:

Loan Grade

A

B

C

D

E

F

G

Fee

0.75

%

1.00

%

1.50

%

2.00

%

2.00

%

2.00

%

2.00

%

Beginning June 17, 2008, our origination fees increased and
now range from 0.75% to 3.00% of the aggregate principal amount
of the member loan, as set forth below:

Loan Grade

A

B

C

D

E

F

G

Fee

0.75

%

1.50

%

2.00

%

2.50

%

2.75

%

3.00

%

3.00

%

The borrower origination fee is included in the APR calculation
provided to the borrower member and is deducted from the gross
loan proceeds prior to disbursement of funds to the borrower
member. We do not receive a borrower origination fee if a member
loan request does not close and fund.

Borrower
Origination Fees  Loans Held for Investment

We compute borrower origination fees for loans we fund directly
by subtracting the average costs of originating a loan from the
aggregate fee charged to the borrower member for the loan. We
initially defer this net amount and subsequently amortize the
balance over the servicing period of the member loan, which is
currently 36 months for each funded loan. Beginning
June 17, 2008, the borrower origination fee for loans
funded by us was increased as described above.

We also generate revenue from interest earned on loans held for
investment. When payments are received, the interest portion
paid by our borrower members on the loans we have funded and the
amortization of the origination fees are recorded as interest
income. Interest, excluding amortization of origination fees,
currently ranges from 7.37% to 18.86% per annum and in fiscal
2008, we recorded $75,308 in interest income from the loans we
have funded. We expect the amount of revenue generated from
interest income on our loans held for investment to increase in
the near term as we have self-funded the platform since
April 7, 2008.

Interest
from Cash and Investments

Interest from cash and investments held in bank accounts is
recorded as it is earned. At March 31, 2008, we had
approximately $5.6 million in cash and cash equivalents. We
primarily invest our cash in interest bearing money market
funds. In fiscal 2008 and 2007, we recorded interest earned from
cash and investments held in bank accounts of $195,703 and
$2,927 respectively.

Borrower
Unsuccessful Payment Fees

Our procedures generally require the automatic debiting of
borrower member bank accounts by ACH transfer, although we allow
payment by check, subject to a five percentage point increase in
the interest rate. We charge an unsuccessful payment fee to a
borrower member to cover the cost we incur if an automatic
payment fails and is rejected by the borrower members
bank, for example if there is an insufficient balance in the
bank account or if the account has been closed or otherwise
suspended. We consider each attempt to collect the monthly
payment to be a separate transaction and may assess an
unsuccessful payment fee for each failed attempt. We retain the
entire amount of an unsuccessful payment fee, which is currently
$15.00 per transaction, or such lesser amount permitted by law,
to cover our costs.

Interest
Expense

Interest expense consists primarily of cash and non-cash
interest. In fiscal 2008, we paid cash of $63,713 for interest
due on our loans payable with our creditors. In fiscal 2008, we
recorded interest expense of $14,685 for interest due on our
convertible notes. In addition, we recorded non-cash interest
expense of $49,050 and $22,344 for the amortization of debt
discount and beneficial conversion feature associated with
warrants issued in connection with the convertible notes issued
in fiscal 2008. In fiscal 2007, the Company did not incur any
interest expense. We expect interest expense to continue to
increase in fiscal 2009 as a result of our additional borrowings
discussed below under Liquidity and Capital
Resources.

Provision
for Loan Losses

The allowance for loan losses, which management evaluates on a
periodic basis, represents an estimate of potential credit
losses inherent in the portfolio of loans we hold for investment
and is based on a variety of factors, including the composition
and quality of the loan portfolio, delinquency levels and
trends, probable expected losses for the next twelve months,
current and historical charge-off and loss experience, current
industry charge-off and loss experience, the condition of the
market, the interest rate climate and general economic
conditions. Determining the adequacy of the allowance for loan
losses is subjective, complex and requires judgment by
management about the effect of matters that are inherently
uncertain. Moreover, in light of our limited operating history,
we do not have significant historical experience from which to
estimate expected losses in our portfolio.

In fiscal 2008, we recorded a loan loss reserve of $373,624
against the outstanding principal balance of loans held for
investment. This reserve has been netted against our loans held
for investment balance at March 31, 2008. We expect our
loan loss reserve to increase in the near future due to the
expected increase in the amount of loans held for investment.

We charge lender members an ongoing service charge in respect of
loans they have purchased through our platform and will continue
to charge this amount in the future with respect to the Notes.
The service charge offsets the costs we incur in servicing
member loans, including managing payments from borrower members,
payments to lender members and maintaining account portfolios.
This service charge is equal to 1.00% of all amounts paid by
Lending Club to a lender member with respect to a loan. The
service charge is deducted from any payments on a loan before
the net amounts of those payments are allocated to the lender
members Lending Club accounts.

Under the terms of our loan agreements with our borrower
members, we have the right to charge a late payment fee of
$15.00 or five percent of the outstanding payment, whichever is
greater, or such lesser amount permitted by law, if the borrower
members payment is more than 15 days late. We deduct
a service charge equal to 1.00% of the amount of any late
payment fee collected before the net amount of the payment is
allocated to the lender members Lending Club account.

Operating
Expenses

Sales,
Marketing, and Customer Service Expense

Sales, marketing, and customer service expense consists
primarily of salaries, benefits and stock-based compensation
related to marketing and customer service personnel, contracting
personnel, service providers, travel and other reimbursable
expenses and marketing programs, such as trade shows and
marketing campaigns. Sales, marketing, and customer service
expenses for the year ended March 31, 2008 were
$2.28 million, an increase of $2.20 million, or 2739%,
over sales and marketing expenses of $80,300 for the year ended
March 31, 2007. The increase was primarily due to increased
headcount and implementing marketing and customer service
programs associated with the May 2007 launch of our platform.

Engineering
Expense

Engineering expense consists primarily of salaries, benefits and
stock-based compensation of personnel and the cost of
subcontractors who work on the development and maintenance of
the Companys lending platform and software enhancements
that run the Companys lending platform. Engineering
expenses for the year ended March 31, 2008 were
$1.78 million, an increase of $1.68 million, or 1632%,
over engineering expenses of $103,000 for the year ended
March 31, 2007. The increase was primarily due to increased
headcount and development and the launch of our platform.

General
and Administrative Expense

General and administrative expense consists primarily of
salaries, benefits and stock-based compensation related to
general and administrative personnel, professional fees
primarily related to legal and audit fees, facilities expenses
and the related overhead, and bad debt expense.

General and administrative expenses for the year ended
March 31, 2008 were $2.88 million, an increase of
$2.44 million, or 352%, over general and administrative
expenses of $0.64 million for the year ended March 31,
2007.

The increase was due primarily to increased headcount and legal
and consulting expenses. We expect that general and
administrative expenses will increase in absolute terms due to
the significant planned investment in infrastructure to support
our growth and the additional expenses related to becoming an
SEC reporting company, including the increased cost of
compliance and increased audit fees resulting from required SEC
filings. As a percentage of revenues, we expect general and
administrative expenses to decrease as we grow.

Liquidity
and Capital Resources

The financial statements included in this registration statement
have been prepared assuming that the Company will continue as a
going concern; however, the conditions discussed below raise
substantial doubt about the Companys ability to continue
as a going concern. The financial statements do not include any

adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and
classifications of liabilities that may result should the
Company be unable to continue as a going concern.

The Company has incurred operating losses since its inception.
For fiscal 2008, the Company incurred a net loss of
$7.0 million and had negative cash flow from operations of
$6.0 million. Additionally, the Company has an accumulated
deficit of $7.8 million since inception and a stockholder
deficit of $4.8 million as of March 31, 2008.

Since its inception, the Company has financed its operations
through debt and equity financing from various sources. The
Company is dependent upon raising additional capital or seeking
additional debt financing to fund its current operating plans
for the foreseeable future. Failure to obtain sufficient debt
and equity financing and, ultimately, to achieve profitable
operations and positive cash flows from operations could
adversely affect the Companys ability to achieve its
business objectives and continue as a going concern. Further,
there can be no assurance as to the availability or terms upon
which the required financing and capital might be available.

Net cash used in operating activities from inception through
March 31, 2008 consisted mostly of increases in headcount
costs, expenses for consultants and temporary personnel and
other professional service providers to the Company.

Net cash used in investing activities was $7.3 million for
the fiscal year ended March 31, 2008, and $38,100 for the
fiscal year ended December 31, 2007. In fiscal 2008, net
cash used in investing activities consisted mainly of our
$7.0 million investment in loans to borrower members. Other
investment activities included opening certificates of deposits
tied to our loans payable and from capital expenditures for
purchases of property and equipment. Net cash provided by
financing activities was $18.6 million for the fiscal year
ended March 31, 2008, and $0.7 million for the fiscal
year ended March 31, 2007. Cash provided by financing
activities consisted primarily of proceeds from the issuance of
our convertible preferred stock in our first round of venture
capital funding in August 2007 and our issuance of long-term
debt.

On October 29, 2007, we entered into a secured
$3.0 million loan facility with Silicon Valley Bank
(SVB). As of March 31, 2008, we had drawn down
the entire amount of the facility. Interest on borrowings under
the loan facility is at a per annum rate fixed as of the funding
date of each advance equal to the greater of (i) SVBs
prime rate of interest plus 0.75% or (ii) 8.50%. We also
paid a commitment fee of $15,000 on the effective date of the
loan facility and $11,400 of SVBs expenses in connection
with the facility. The borrowings under the credit facility are
secured by a blanket lien on substantially all of our assets,
except for our intellectual property rights. Following the date
of this prospectus, payments we receive in respect of borrower
member loans on which the Notes are dependent will also be
excluded from the blanket lien. In connection with this
facility, we issued a fully vested warrant to purchase
98,592 shares of Series A convertible preferred stock
to SVB. SVB also received the right to invest up to $500,000 in
our next round of equity financing on the same terms as offered
to other investors. Additionally, the SVB facility requires us
to maintain a certificate of deposit with SVB of $150,000 until
repayment.

On February 20, 2008, we entered into a secured
$5.0 million credit facility with Gold Hill Venture
Lending 03, LP (Gold Hill). As of
March 31, 2008, we had drawn down $3.6 million under
this facility. Interest on the borrowings under the credit
facility is at a fixed rate of 10% per annum. Under the terms of
this facility, we agreed to remit to Gold Hill, at the end of
the amortization period, an amount equal to 1% of the total
amount borrowed under that facility. We also paid a commitment
fee of $25,000 on the effective date of the credit facility.
Borrowings under the credit facility are secured by a lien on
substantially all of our assets, except for our intellectual
property rights. Following the date of this prospectus, payments
we receive in respect of borrower member loans on which the
Notes are dependent will also be excluded from the blanket lien.
Gold Hills lien is pari passu with SVBs lien
described above. In connection with this facility, we issued
fully vested warrants to purchase an aggregate of
289,201 shares of Series A convertible preferred stock
and Gold Hill received the right to invest up to $500,000 in our
next round of equity financing on the same terms as offered to
other investors. The Gold Hill facility requires us to maintain
a certificate of deposit with SVB of $250,000 until repayment.

As of the date of this filing, we are in violation of certain
covenants under our SVB and Gold Hill facilities be